Overview Key strengths Key risks Strong support from parent Japfa Ltd. High product focus on poultry, and geographic concentration in Indonesia. Second-largest poultry producer and breeder in Indonesia's oligopolistic market. Heightened raw material prices to tighten margins and increase working capital needs. Vast distribution system with a vertically integrated model that is difficult to replicate. Capital expenditure (capex) to reaccelerate to support growth, after being frozen for two years during the pandemic. Likely weakening in parent Japfa Ltd.?s creditworthiness following the completion of distribution in specie of its entire shareholding in the AustAsia dairy business. In our view, Japfa Ltd. will lose the scale and diversification benefits derived from its China-based dairy business. This includes a higher operating margin and
