Indonesia Dairy Demand Boost Has Legs Beyond Policy — Market Talk

Indonesia's dairy sector is likely to benefit from the government's free school meals program, as it drives a step-up in consumption, says Bahana Sekuritas. The program is expected to add demand equivalent to 15% of the broader dairy market and 30% of the liquid milk segment over the next two years, the analysts estimate. They note the program may support building consumption habits that extend demand beyond the program's lifespan. The brokerage initiates coverage of the sector with an overweight rating, starting coverage of Cisarua Mountain Dairy, Indofood CBP Sukses Makmur and Ultrajaya Milk Industry with buy ratings and target prices of IDR6,200.00, IDR9,200.00, and IDR2,500.00, respectively. Shares of Cisarua Mountain Dairy, Indofood CBP Sukses Makmur, and Ultrajaya Milk Industry last at IDR4,430.00, IDR7,300.00, and IDR1,500.00, respectively. (ronnie.harui@wsj.com)