JPFA - Policy tailwind after strong 1Q26 results

KBVS Update
Monday, 15 June 2026

JPFA - Policy Tailwind After Strong 1Q26 Results
(Upgraded to BUY, with same TP IDR2,500)

* Japfa Comfeed Indonesia' (JPFA) has received and has to comply to another request from the government via Ministry of Agriculture (MoA), which urged poultry players to support local chicken farmers by implementing a floor price of around IDR19,500 per kg for LB. Thus, we remain positive on the request with new LB floor price, as the higher LB’ ASP should more than offset the increase in costs, thereby supporting margins. Moreover, JPFA is likely to continue to improve its efficiency amid current economic conditions.

* JPFA' 1Q26 earnings reached IDR1.82 tn (+167% yoy/+14.1% qoq) on higher LB’ and DOC’ demand and ASP during festivities, despite higher LC’ and SBM’ prices, which came above ours’ (42.2%) and consensus’ (43.9%) expectations.  

* JPFA’ 1Q26 revenue grew 23.6% yoy/0.6% qoq on higher LB’ and DOC’ demand and ASP during festivities. Thus, JPFA' 1Q26 revenue came above ours' (26.7%) and cons' (27.5%) expectation.

* JPFA' gross profit grew 67.7% yoy/1% qoq in 1Q26, on higher sales and ASP, despite higher LC' and SBM’ prices. While, JPFA' EBIT grew 133.8% yoy/15.4% qoq to in 1Q26 on better cost management despite THR disbursement by the company to its employees. All in all, JPFA’ gross, EBIT and net margin expanded to 25.5% (+670bps yoy/+10bps qoq), 14.8% (+700bps yoy/+190bps qoq) and 10.3% (+560bps yoy/+130bps qoq), respectively in 1Q26.

* Thus, we maintained our ‘26F revenue and earnings for JPFA and upgraded to BUY, with same TP of IDR2,500 (implying 6.8x ‘26F P/E) on the company’ continued efficiency improvements and the potential positive impact of the government’ latest request, despite our anticipation of 

Regards,
Andre Suntono - KBVS Research team