Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<p><br/> Japfa Comfeed's H1/23 results remained weak, with a large drop in profitability on account of an oversupply of poultry, higher raw-material costs and lower consumer demand. While there was sequential improvement in Q2, the overall H1 results remained significantly weaker y-o-y. The company's financial risk profile continued to deteriorate, while liquidity worsened.<br/><br/> We revise our LARA on Japfa to "High Risk" from "Medium Risk", given the company's quickly deteriorating liquidity profile and increasing leverage. The inadequate liquidity position and fast-rising leverage are no longer in line with that of a "Medium Risk" credit. <br/></p>

  Japfa Comfeed's H1/23 results remained weak, with a large drop in profitability on account of an oversupply of poultry, higher raw-material costs and lower consumer demand. While there was sequential improvement in Q2, the overall H1 results remained significantly weaker y-o-y. The company's financial risk profile continued to deteriorate, while liquidity worsened.   We revise our LARA on Japfa to "High Risk" from "Medium Risk", given the company's quickly deteriorating liquidity profile and increasing leverage. The inadequate liquidity position and fast-rising leverage are no longer in line with that of a "Medium Risk" credit.  

Japfa Comfeed - Earnings Flash - H1 FY 2023 Results - Lucror Analytics

Head of Asia, Lucror Analytics

Charles Macgregor

Head of Asia

<p><br/> The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.<br/></p>

  The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market. 

Asia HY Monthly - September 2023 - Lucror Analytics

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Equity Bottom-Up

Japfa Comfeed Indonesia / Equity Bottom-Up

<ul><li>JPFA reported net losses of IDR250bn in 1Q23, surpassing the net losses of IDR8bn in 4Q22 and a massive swing from net profits of IDR604bn in 1Q22.</li><li>Based on core net losses, 1Q23 is the second worst quarter historically after 3Q21.</li><li>The net losses reflect persistently high raw material costs and lower DOC and broiler ASP. We maintain our HOLD call with a TP of IDR1,000.</li></ul><div><div><div id="ember2099"><div><div><div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p></div></div></div></div></div></div>

JPFA reported net losses of IDR250bn in 1Q23, surpassing the net losses of IDR8bn in 4Q22 and a massive swing from net profits of IDR604bn in 1Q22.Based on core net losses, 1Q23 is the second worst quarter historically after 3Q21.The net losses reflect persistently high raw material costs and lower DOC and broiler ASP. We maintain our HOLD call with a TP of IDR1,000.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Japfa Comfeed Indonesia(JPFA IJ): Losses from Lower ASPs and High Costs

<p>Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).<br/> We view Japfa Comfeed's ESG as "Adequate" based on parent company Japfa Ltd's sustainability reports, as Japfa Comfeed has minimal relevant information in its own annual reports.<br/><br/> The overall score is in line with the Environmental, Social and Governance pillars. Controversies are "Immaterial" and Disclosure is "Adequate".<br/></p>

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).  We view Japfa Comfeed's ESG as "Adequate" based on parent company Japfa Ltd's sustainability reports, as Japfa Comfeed has minimal relevant information in its own annual reports.   The overall score is in line with the Environmental, Social and Governance pillars. Controversies are "Immaterial" and Disclosure is "Adequate". 

Japfa Comfeed - ESG Report - Lucror Analytics

<p><br/> In our view, Japfa Comfeed’s FY 2022 results were decent, considering the difficult operating conditions following two years of COVID-19, the high-cost environment (owing to geopolitical tensions) as well as heightened inflation. Revenue growth was reasonable, while profitability was under pressure. Credit metrics deteriorated, but remained modest. Liquidity continues to be weak, due to material short-term debt.<br/><br/> We expect better FY 2023 results. We believe that operating conditions will improve, with the surge in soft commodity prices gradually being passed through to the end-consumer. We project: [1] steady revenue growth of c. 10%; [2] stable margins (with room for upside, considering FY 2022 was a weak year); [3] that leverage will at least remain stable, or improve slightly; [4] that (EBITDA-Capex)/Interest should deteriorate, due to the expected higher capex in FY 2023 for continued capacity expansion.<br/><br/> We do not foresee any rating pressure. Japfa is rated B+ (stable) and BB- (stable) by S&P and Fitch, respectively.<br/></p>

  In our view, Japfa Comfeed’s FY 2022 results were decent, considering the difficult operating conditions following two years of COVID-19, the high-cost environment (owing to geopolitical tensions) as well as heightened inflation. Revenue growth was reasonable, while profitability was under pressure. Credit metrics deteriorated, but remained modest. Liquidity continues to be weak, due to material short-term debt.   We expect better FY 2023 results. We believe that operating conditions will improve, with the surge in soft commodity prices gradually being passed through to the end-consumer. We project: [1] steady revenue growth of c. 10%; [2] stable margins (with room for upside, considering FY 2022 was a weak year); [3] that leverage will at least remain stable, or improve slightly; [4] that (EBITDA-Capex)/Interest should deteriorate, due to the expected higher capex in FY 2023 for continued capacity expansion.   We do not foresee any rating pressure. Japfa is rated B+ (stable) and BB- (stable) by S&P and Fitch, respectively. 

Japfa Comfeed - Earnings Flash - FY 2022 Results - Lucror Analytics

Indonesia

PT Japfa Comfeed Indonesia Tbk manufactures animal feed, breeds and processes chickens, and operates aquaculture farms.  The Company trades its products domestically and internationally.

52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Japfa Comfeed Indonesia (JPFA IJ)

Japfa Comfeed - Earnings Flash - H1 FY 2023 Results - Lucror Analytics

Japfa Comfeed's H1/23 results remained weak, with a large drop in profitability on account of an oversupply of poultry, higher raw-material costs...

Lucror Analytics

Asia HY Monthly - September 2023 - Lucror Analytics

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top...

Lucror Analytics