Poultry: Potentially Higher Feed and Poultry Prices from Govt. Plan to Centralize SBM Imports Through SOE (OVERWEIGHT)

Stock Code	Last Price	Change	Change %
POLU	14,025	2,325	19.87%
ITMG	23,700	1,350	6.04%
UNTR	22,700	950	4.37%
SINI	9,900	900	10.00%
FORU	3,800	730	23.78%
AADI	8,700	650	8.07%
RLCO	3,020	600	24.79%
PANI	6,800	525	8.37%

Poultry

Potentially Higher Feed and Poultry Prices from Govt. Plan to Centralize SBM Imports Through SOE

Govt’s plan to shift SBM imports to SOE could negatively impact FY26F EBITDA by an estimated 1.1-3.8% if SBM costs rise by 7% from Apr26.
The higher costs will negatively impact ST feed margin, while in LT, it will eliminate less efficient players and bring consumer chicken prices up.
We maintain Overweight as larger size integrators will benefit in the LT and FY26F supply-demand remains favorable.

Regulating SBM import through SOE

The Indonesian government plans to shift soybean meal (SBM) import authority from private companies to a state-owned enterprise (PT Berdikari) starting in 2026, aiming to ensure controlled and nationally aligned feed supply and pricing. SBM accounts for about 20-25% of typical poultry feed and is the largest annual imported feed ingredient. To avoid market disruption during the transition, private firms are still permitted to import SBM directly until March 31, 2026, with volume subject to coordination with PT Berdikari, and are given opportunities to request additional import allocations if needed. The government also required traders not to hoard stock to maintain price stability.

Potentially higher SBM costs

While Indonesia has historically sourced SBM mainly from Brazil and Argentina, centralized imports may reduce flexibility in origin selection. If country trade deals lead to more import from the U.S., which structurally trades at a price premium, it could lift the effective base feed cost, which we estimate at around 2%. Aside from higher base prices, SBM cost will be higher due to the trader’s margin, which we estimate at around 5% based on FY24 Berdikari’s gross margin in the government assignment segment. Despite the potential 7% increase in SBM price, note that this will affect all feedmillers.

ST feed margin compression, LT impact to consumer prices

Based on our estimate, a 7% increase in SBM costs starting in Apr26 will negatively impact 1.1-3.8% FY26F EBITDA and 1.4-8.1% FY26F net profits. Typically, albeit lagging, industry-wide feed costs increases will be passed through to higher feed prices. Hence, in the long run, feed margin will stabilize, but it will eliminate less efficient poultry farms and/or bring chicken prices up.

Impact shall be continued, maintain sector Overweight rating

While the new regulations will negatively impact on the integrators’ margin and earnings in the near term, we believe larger size integrators will thrive in the long term given their bigger economic of scale advantages. We maintain Overweight as we see a favorable poultry supply-demand in FY26F with CPIN as our top pick given its less crowded position and underperformance. Tactical 3M rating: OW, as we see potential positive catalysts in the near term from Eid festive, corn harvest season, and robust financial results release. Risks to our view are extreme weather affecting local corn and SBM supply, and further deteriorating consumer purchasing power.

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