Japfa

Japfa: (S$0.81) 2Q16 profit surge on Indon market recovery; which could be short-lived-2Q16 headline net profit surged to US$44.6m (2Q15: US$3m), thanks the continued recovery in the Indonesia poultry business. - Excluding FX, core net profit of US$51.9m (+194.4%) was its best quarterly results since 2013.-Management is cautious towards policy shifts that could impact competitive landscape.-A culling program has also been stopped in light of a case brought against Japfa and 11 other poultry companies. The halt of the program may bring back supply demand imbalance of day-old-chicks.- Trading at 10.4x FY16e P/E based on a single broker’s estimate