JAKARTA – The performance of food-related stocks such as PT Charoen Pokphand Indonesia Tbk (CPIN) and PT Japfa Comfeed Indonesia Tbk (JPFA) has remained relatively unchanged, as the market anticipates weaker results in the second half (2H) of 2024.

A decline in broiler chicken prices is one of the market's concerns, according to a report by PT Ina Sekuritas Indonesia. Nevertheless, the profitability of food-related companies like CPIN and JPFA is expected to remain stable in 2H 2024, according to the report.

Looking ahead to 2025, CPIN and JPFA are projected to maintain profitability, especially with the Indonesian government's food estate and Free Nutritious Meals (MBG) programs.

"Overall, we give an overweight recommendation to the poultry sector, with JPFA ranked first, followed by CPIN," stated Ina Sekuritas in its report.

This recommendation is based on JPFA's stronger performance in 9M 2024. Additionally, the company, owned by Japfa Ltd., is seen as having attractive valuations and significant upside potential.

However, JPFA and CPIN still face challenges and uncertainties related to self-culling practices. These challenges continue to exert pressure on broiler chicken and Day Old Chick (DOC) prices. (KR/ZH)

Check out full report here.