Charoen Pokphand Indonesia (CPIN.IJ Rp 4,500; BUY TP Rp 6,800) FY24 Results – In line core net profit; headline net profit beat ours and consensus’ est.

Stock Code	Last Price	Change	Change %
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SHIP	2,100	210	11.11%

Charoen Pokphand Indonesia (CPIN IJ)

FY24 Results – In line core net profit; headline net profit beat ours and consensus’ est.

Despite the high effective tax rate in 4Q24, CPIN reported a net profit of Rp1.3tr (+114% qoq), above ours (107%) and consensus (115%).
The robust earnings were driven by margin expansion across all business segments, especially the turnover in livebird business.
We raised FY25-26F est. by 9-16%. Maintain Buy with a higher TP of Rp6,800 as we believe the current -2SD valuation is unjustified.

Above ours and consensus amid the high effective tax rate

CPIN reported a net profit of Rp1.3tr in 4Q24 (+114% qoq, reversing losses in 4Q23). Despite a significantly higher tax rate of 29.4%, CPIN delivered FY24 net profit of Rp3.7tr (+60% yoy), above our estimate (107%) and consensus (115%) FY24F. The elevated 4Q24 tax rate of 39.4% partially offset CPIN’s strong operating profit of Rp2.1tr (+124% qoq). Excluding the fair value gain on biological assets, CPIN booked a core net profit of Rp1.0tr in 4Q24. FY24’s core net profit stood at Rp3.46tr, in line with our estimates.

Supported by margin expansion across business segments

The qoq net profit increase was driven by higher margins across all segments. Despite higher opex (+24% qoq, +10% yoy), OPM doubled from 5.6% in 3Q24 to 11.8% in 4Q24, likely due to combination of higher ASP and lower input costs. Gross revenues were flat qoq but grew 13% yoy in 4Q24, as the decline in feed revenues was offset by higher DOC and livebird revenues. Feed revenues declined by 7% qoq, but feed OPM improved 117bps qoq to 9.7%, driven by lower SBM prices (-10%) offsetting higher corn prices (+3%), in our view. Both DOC and broiler business recorded positive revenues and margin expansion. The processed food segment maintained a positive OPM in 4Q24.

Revised FY25/FY26 net profit by +9/+16%

We adjusted our numbers considering the robust FY24 results and revised up our FY25/26F net profits by 9/16%. Our new FY25/FY26F implies +6/+10% EBITDA growth and +18/+13% earnings growth on normalized tax rates.

Maintain Buy rating with a higher TP of Rp6,800

Maintain Buy with a higher TP of Rp6,800 (based on 14.9x Fy25F EV/EBITDA) as we revised our FY25F EBITDA by 2% while maintaining our valuation multiple at -0.5SD. Currently CPIN is trading at FY25F 9.9x EV/EBITDA and 16.8x P/E, both of which are at -2SD of its 5-year average. Risk to our view are lower LB prices and foreign outflow.

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