CPIN - 1H25 results in-line, despite chicken’ oversupply
KBVS Update
Monday, 11 August 2025
CPIN - 1H25 results in-line, despite chicken' oversupply
(Maintain BUY, with adjusted TP of IDR5,750)
Charoen Pokphand Indonesia’ (CPIN) earnings declined 65.6% yoy/76.4% qoq in 2Q25 on significantly lower demand for chicken (LB, DOC) with a sharp decline in DOC’ and LB’ ASP. Yet, CPIN' 1H25 earnings still grew 7.5% yoy with 30bps net margin expansion, which came in-line with ours’ (45%) and cons' (45%) expectation.
CPIN' revenue declined 9.9% yoy/13.3% qoq in 2Q25 on significantly lower demand for chicken (LB, DOC) post Lebaran festivities, which made an oversupply condition for chicken and lowered LB’ & DOC’ ASP. Yet, CPIN still recorded 0.3% yoy revenue growth in 1H25 mainly on solid 1Q25 results with better DOC’ and LB’ ASP. As a result, CPIN’ 1H25 revenue still came in-line with ours’ (45%) and cons’ (47%).
CPIN’ gross’, EBIT’ and net’ margin contracted to 10.4% (-620bps yoy/-730bps qoq), 3% (-700bps yoy/-830bps qoq) and 2.4% (-380bps yoy/-630bps qoq), respectively in 2Q25, on significantly weaker chicken’ (DOC & LB) demand with a much lower ASP, despite with lower soybean-meal' (SBM) prices and stable Local Corn' (LC) prices. Fortunately, CPIN’ net margin still expanded by 30bps yoy in 1H25 on stable LC' prices, lower SBM' prices and income tax expense.
We adjusted down our CPIN ‘25F revenue growth (-5.4% from prior) in ‘25F due to lower than anticipated chicken’ (DOC &LB) demand with much lower ASP in 2Q25. As a result, it affected our ‘25F earnings for CPIN to be 5.7% lower than prior.
All in all, we still expect CPIN to grow its ‘25F earnings by 8% yoy with around 20bps yoy net margin expansion, on a potential of higher chicken' demand with DOC' and LB' ASP recovery in 2H25F, amidst current economic condition.
Maintain BUY on CPIN with adjusted TP of IDR 5,750/share, which implies 23.5x ‘25F P/E as we think that CPIN’ good costs management would be the key factor in ‘25F amidst Indonesia’ current economic condition. Currently, CPIN is trading at 18.6x ‘25F P/E or slightly above its -2stdev of its 5 years’ mean P/E.
Regards,
Andre Suntono – KBVS Research Team