Poultry (Overweight/Maintain) - Record Prices as Local Money Steps In

Broiler price hit a record IDR24,351/kg in August 2026 (+30.5% MoM, +30.1% YoY), while DOC surged to a two-year high of IDR7,275/chick (+37.6% MoM, +22.5% YoY). We attribute the DOC gain to firm broiler prices, which we believe stem from lower oversupply against strong MBG demand. Corn edged up to IDR6,573/kg (+1.3% MoM, +22.4% YoY), and its 8M26 average (+36.6% YoY) is running ahead of DOC (+18.7%) and broiler (+15.1%), but we believe higher MBG volumes more than cover the faster input cost growth.

JPFA rose 2.3% MoM in August but lagged the JCI (+4.6%), while CPIN underperformed the index by 14.1ppt. Both posted a third straight month of net foreign outflows, at IDR89bn for JPFA and IDR953bn for CPIN, and we attribute CPIN's larger figure to MSCI rebalancing. Local investors took the other side, as local ownership rose 0.8ppt MoM to 20.4% at JPFA and 1.3ppt to 14.0% at CPIN, the latter's largest monthly gain in a year.

We maintain our Overweight rating on the sector, given sustained strength in DOC and broiler prices following the resumption of the MBG program. We nevertheless downgrade CPIN to Hold from Trading Buy on lower upside potential, while JPFA remains a Buy. Both trade at attractive valuations, CPIN at 1.5 S.D. below its five-year EV/EBITDA mean and JPFA at 1 S.D. below. Key risks are lower than expected DOC and broiler prices, higher than estimated input costs, and a lower than expected MBG impact.