Triputra Agro Persada (TAPG IJ) (Buy) - Strong combination of higher price + productivity

Strong combination of higher price + productivity

Maintain Buy with higher TP of IDR2,100

We expect CPO prices to rise structurally

We believe CPO prices will remain strong going forward on the back of additional demand owing to Indonesia’s biodiesel mandate to increase the palm oil blend in diesel fuel to 50% (B50), which is in line with President Prabowo’s energy security initiatives in order to lower the dependency on oil imports. We believe the demand for B50 next year will require ~17.5mn tons of CPO (vs. ~13.5mn tons for B40). This additional ~4mn tons of CPO demand will likely surpass our estimated 2-3mn Indonesia supply growth in FY26F. Therefore, we forecast Indonesia CPO stock level to hover below 3mn tons in FY26F (vs. average 4.0-4.5mn tons historically), resulting in likely higher CPO price range y-y. As a result, the average CPO price can reach USD1,350/ton (+7% y-y) in 2026F. On top of biodiesel-led demand, we expect potential higher global demand from the oleochemical sector, driven by higher cosmetics consumption.

Reduced burden for companies from the biodiesel subsidy scheme

Currently, CPO companies spend less to support the expansion of the biodiesel program as the government has cut the biodiesel subsidy for the industry, resulting in increased cost saving for the CPO fund. As a result, CPO firms can now enjoy higher margins due to strong CPO prices. While we see room for a potential higher levy to fund the biodiesel mandate expansion in the future, it will be largely compensated by higher CPO prices, resulting in further margin expansion.

TAPG’s high productivity can accelerate earnings growth

We estimate Indonesia FFB production to grow by +2%/+3% in FY25F/FY26F, post-El Nino effect and better rainy season impact. With a more productive age profile (average 14 years old), we believe TAPG will report FFB growth of ~+5%/+4% in FY25F/FY26F, higher than the industry. As a result, we estimate TAPG’s earnings growth should be faster than the industry.

Maintain Buy rating with higher TP of IDR2,100, implying 51% upside

We raise our NPAT estimate by 3%/26% for FY25F/FY26F on the back of rising CPO prices and margin expansion. We maintain our Buy call with a higher TP of IDR2,100 (from IDR1,285), using a higher target valuation of 13x FY25F P/E (from 8x). This is slightly higher than regional peers at 12x P/E FY25E (consensus) due to TAPG’s higher productivity and ROE. Currently, the stock trades at 8.5x P/E, with 30% ROE FY25F, and our estimated dividend yield of ~12%. A downside risk would be higher-than-expected fertilizer costs.

Year-end 31 Dec	FY24		FY25F		FY26F		FY27F
Currency (IDR)	Actual	Old	New	Old	New	Old	New
Revenue (bn)	9,671	9,947	10,695	9,713	11,660	0	11,822
Reported net profit (bn)	3,120	3,162	3,243	2,986	3,752	0	3,854
Normalised net profit (bn)	3,120	3,162	3,243	2,986	3,752	0	3,854
FD normalised EPS	157.19	159.31	163.38	150.45	189.00		194.17
FD norm. EPS growth (%)	94.0	35.6	3.9	-5.6	15.7		2.7
FD normalised P/E (x)	8.9	–	8.5	–	7.4	–	7.2
EV/EBITDA (x)	6.4	–	5.9	–	5.1	–	5.0
Price/book (x)	2.6	–	2.5	–	2.4	–	2.4
Dividend yield (%)	11.0	–	11.5	–	13.3	–	13.6
ROE (%)	28.8	25.5	29.8	21.2	33.3		33.1
Net debt/equity (%)	net cash	net cash	0.7	net cash	net cash		net cash

Source: Company data, Verdhana estimates

Key data on Triputra Agro Persada

Income statement (IDRbn)
Year-end 31 Dec	FY23	FY24	FY25F	FY26F	FY27F
Revenue	8,326	9,671	10,695	11,660	11,822
Cost of goods sold	-6,109	-5,949	-6,638	-6,943	-6,960
Gross profit	2,217	3,723	4,058	4,717	4,862
SG&A	-875	-894	-987	-1,022	-1,042
Employee share expense	0	0	0	0	0
Operating profit	1,342	2,829	3,071	3,696	3,820
EBITDA	1,954	3,445	3,802	4,501	4,708
Depreciation	-612	-617	-731	-805	-887
Amortisation	0	0	0	0	0
EBIT	1,342	2,829	3,071	3,696	3,820
Net interest expense	-75	-11	-4	30	37
Associates & JCEs	643	894	999	1,026	1,033
Other income	30	216	8	8	8
Earnings before tax	1,941	3,927	4,073	4,760	4,898
Income tax	-280	-686	-676	-821	-850
Net profit after tax	1,661	3,241	3,397	3,938	4,048
Minority interests	-53	-120	-154	-187	-193
Other items	0	0	0	0	0
Preferred dividends	0	0	0	0	0
Normalised NPAT	1,608	3,120	3,243	3,752	3,854
Extraordinary items	0	0	0	0	0
Reported NPAT	1,608	3,120	3,243	3,752	3,854
Dividends	-1,807	-3,057	-3,178	-3,676	-3,776
Transfer to reserves	-198	63	65	76	78
Valuations and ratios
Reported P/E (x)	17.2	8.9	8.5	7.4	7.2
Normalised P/E (x)	17.2	8.9	8.5	7.4	7.2
FD normalised P/E (x)	17.2	8.9	8.5	7.4	7.2
Dividend yield (%)	6.5	11.0	11.5	13.3	13.6
Price/cashflow (x)	13.3	7.3	7.1	6.2	5.9
Price/book (x)	2.5	2.6	2.5	2.4	2.4
EV/EBITDA (x)	10.9	6.4	5.9	5.1	5.0
EV/EBIT (x)	14.2	7.5	7.0	6.0	5.9
Gross margin (%)	26.6	38.5	37.9	40.5	41.1
EBITDA margin (%)	23.5	35.6	35.6	38.6	39.8
EBIT margin (%)	16.1	29.2	28.7	31.7	32.3
Net margin (%)	19.3	32.3	30.3	32.2	32.6
Effective tax rate (%)	14.4	17.5	16.6	17.3	17.4
Dividend payout (%)	112.3	98.0	98.0	98.0	98.0
ROE (%)	15.4	28.8	29.8	33.3	33.1
ROA (pretax %)	15.6	28.8	30.5	33.9	33.6
Growth (%)
Revenue	-10.9	16.2	10.6	9.0	1.4
EBITDA	-45.3	76.3	10.4	18.4	4.6
Normalised EPS	-46.1	94.0	3.9	15.7	2.7
Normalised FDEPS	-46.1	94.0	3.9	15.7	2.7
Source: Company data, Verdhana estimates

Cashflow statement (IDRbn)
Year-end 31 Dec	FY23	FY24	FY25F	FY26F	FY27F
EBITDA	1,954	3,445	3,802	4,501	4,708
Change in working capital	-139	55	-101	-62	-14
Other operating cashflow	266	292	172	56	34
Cashflow from operations	2,081	3,792	3,873	4,495	4,727
Capital expenditure	-802	-522	-1,163	-1,107	-1,281
Free cashflow	1,279	3,269	2,710	3,388	3,447
Reduction in investments	-343	213	-150	-158	-165
Net acquisitions	0	0	0	0	0
Dec in other LT assets	-42	54	59	48	38
Inc in other LT liabilities	49	-29	0	0	0
Adjustments	0	0	0	0	0
CF after investing acts	943	3,507	2,620	3,278	3,319
Cash dividends	-754	-1,807	-3,057	-3,178	-3,676
Equity issue	0	0	0	0	0
Debt issue	-1,213	-21	-110	-99	-89
Convertible debt issue	0	0	0	0	0
Others	73	-1,377	154	187	193
CF from financial acts	-1,894	-3,204	-3,014	-3,090	-3,572
Net cashflow	-951	302	-394	188	-252
Beginning cash	1,958	1,007	1,309	915	1,103
Ending cash	1,007	1,309	915	1,103	851
Ending net debt	114,304	-209	75	-212	-49
Balance sheet (IDRbn)
As at 31 Dec	FY23	FY24	FY25F	FY26F	FY27F
Cash & equivalents	1,007	1,309	915	1,103	851
Marketable securities	0	0	0	0	0
Accounts receivable	108	291	315	338	341
Inventories	1,020	1,035	1,154	1,207	1,210
Other current assets	311	612	619	627	636
Total current assets	2,446	3,247	3,004	3,275	3,038
LT investments	3,289	3,077	3,227	3,385	3,550
Fixed assets	7,483	7,388	7,820	8,122	8,515
Goodwill	0	0	0	0	0
Other intangible assets	0	0	0	0	0
Other LT assets	650	595	536	488	450
Total assets	13,867	14,307	14,586	15,270	15,554
Short-term debt	920	770	693	624	561
Accounts payable	568	669	718	740	741
Other current liabilities	470	924	924	924	924
Total current liabilities	1,959	2,362	2,335	2,288	2,226
Long-term debt	201	330	297	267	241
Convertible debt	0	0	0	0	0
Other LT liabilities	368	339	339	339	339
Total liabilities	2,528	3,031	2,970	2,893	2,806
Minority interest	446	469	622	809	1,002
Preferred stock	0	0	0	0	0
Common stock	5,321	5,321	5,321	5,321	5,321
Retained earnings	6,149	5,954	6,140	6,714	6,892
Proposed dividends	0	0	0	0	0
Other equity and reserves	-576	-467	-467	-467	-467
Total shareholders' equity	10,894	10,808	10,994	11,568	11,746
Total equity & liabilities	13,867	14,307	14,586	15,270	15,554
Liquidity (x)
Current ratio	1.25	1.37	1.29	1.43	1.36
Interest cover	17.9	246.5	690.2	–	–
Leverage
Net debt/EBITDA (x)	58.50	net cash	0.02	net cash	net cash
Net debt/equity (%)	1,049.2	net cash	0.7	net cash	net cash
Per share
Reported EPS (IDR)	81.02	157.19	163.38	189.00	194.17
Norm EPS (IDR)	81.02	157.19	163.38	189.00	194.17
FD norm EPS (IDR)	81.02	157.19	163.38	189.00	194.17
BVPS (IDR)	548.81	544.48	553.84	582.76	591.74
DPS (IDR)	91.01	154.02	160.09	185.19	190.25
Activity (days)
Days receivable	7.8	7.5	10.3	10.2	10.5
Days inventory	63.2	63.2	60.2	62.1	63.4
Days payable	36.9	38.1	38.1	38.3	38.9
Cash cycle	34.0	32.7	32.4	34.0	35.0
Source: Company data, Verdhana estimates

Company profileTAPG is a CPO producer and seller located in Indonesia. It can be split into two major holdings-- AMP (95% ownership) and UTSP (50% ownership). The company has 103k ha of plantation land under AMP and 57k ha of plantation land under UTSP.

Valuation MethodologyOur TP of IDR2,100 is derived from 2025F P/E of 13x, slightly higher than regional peers at 12x FY25E P/E (consensus). The benchmark using JCI Index

Risks that may impede the achievement of the target priceA downside risk would be higher-than-expected fertilizer costs.

ESGDue to sustainability concerns in the CPO industry, ESG certifications are important to export products. TAPG is a member of the RSPO and ISPO, the two main ESG licensing bodies for CPO.

Fig. 1: ASEAN CPO peers comparison

Company	Bloomberg	M Cap	Rating	Target Price	Last Price	Upside	P/E (x)		P/B (x)		ROE (%)		Dividend Yield (%)
Company	Ticker	US$ mn		LC	29-Jul-25	(%)	FY25F	FY26F	FY25F	FY26F	FY25F	FY26F	FY25F	FY26F
Malaysia
SD Guthrie	SDG MK	7,824	Buy	5.8	4.79	21%	13.7	12.9	1.5	1.4	11.2	11.5	4.0	4.0
IOI Corporation	IOI MK	5,509	Buy	4.5	3.76	20%	15.7	15.7	1.9	1.8	12.2	11.8	3.5	3.7
Kuala Lumpur Kepong	KLK MK	5,176	Buy	25	19.68	27%	14.3	12.7	1.5	1.4	10.6	11.3	3.6	4.1
FGV Holdings	FGV MK	1,120	Not Rated	na	1.30	na	16.9	15.5	0.8	0.8	5.4	5.9	3.2	3.2
United Plantations	UPL MK	3,233	Not Rated	na	22.00	na	17.3	17.2	4.9	4.7	28.3	27.3	na	na
Johor Plantations Group	JPG MK	738	Not Rated	na	1.25	na	11.8	11.8	1.1	1.0	9.3	8.7	4.2	4.2
Average							14.9	14.3	1.9	1.9	12.8	12.8	3.7	3.8
Singapore
Wilmar International	WIL SP	14,709	Neutral	3.75	3.03	24%	9.1	7.9	0.7	0.7	7.9	8.6	7.2	8.1
Bumitama Agri	BAL SP	1,126	Not Rated	na	0.84	na	8.6	8.6	1.2	1.2	15.6	14.7	6.9	6.7
First Resources	FR SP	1,879	Not Rated	na	1.56	na	7.4	7.4	1.2	1.1	16.7	15.3	7.0	6.4
Average							8.4	8.0	1.0	1.0	13.4	12.8	7.0	7.1
Indonesia
Astra Agro Lestari	AALI IJ	799	Not Rated	na	6,800	na	12.1	11.8	0.6	0.5	4.6	4.6	4.0	4.4
Triputra Agro Persada	TAPG IJ	1,770	Buy	2,100	1,395	51%	8.5	8.5	2.5	2.4	29.8	33.3	11.5	13.3
Dharma Satya Nusantara	DSNG IJ	796	Not Rated	na	1,230	na	7.4	7.6	1.2	1.1	16.2	13.3	2.2	3.1
London Sumatera	LSIP IJ	577	Not Rated	na	1,385	na	6.6	11.4	0.7	0.7	9.3	6.9	5.4	5.9
Nusantara Sawit Sejahtera	NSSS IJ	581	Not Rated	na	400	na	21.5	18.1	na	na	24.5	22.6	na	na
Average							11.2	11.5	1.2	1.2	16.9	16.1	5.8	6.7

Note: Non-rated estimates are from Bloomberg consensus.
Source: Bloomberg Finance L.P., Verdhana estimates

Fig. 2: Indonesia CPO stock level

We foresee the declining trend of CPO stock to continue, mostly driven by higher biodiesel mandate demand

Source: CAPKI, Verdhana research

Fig. 3: Indonesia monthly CPO production, domestic consumption, and export trend

Domestic consumption increases steadily, reaching a new high level of 2mn tons, similar to export size. Meanwhile, production remains stagnant at average of 3.9mn a month.

Source: GAPKI, Verdhana research

Fig. 4: Indonesia CPO demand

Biodiesel demand keeps increasing, surpassing food industry

Source: GAPKI, Verdhana research

Fig. 5: TAPG — Forward P/E band

Source: Company data, Verdhana estimates

Fig. 6: TAPG — ROE trend

Source: Company data, Verdhana estimates

INVESTMENT RATINGS
A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.

GENERAL DISCLOSURE/DISCLAIMER
This report is prepared by PT Verdhana Sekuritas Indonesia (“PTVSI”) a securities company registered in Indonesia, supervised by Indonesia Financial Services Authority (OJK) and a member of the Indonesia Stock Exchange (IDX).

This report is intended for client of PTVSI only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of PTVSI.

The research set out in this report is based on information obtained from sources believed to be reliable, but PTVSI do not make any representation or warranty as to its accuracy, completeness or correctness. The information in this report is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. Any information, valuations, opinions, estimates, forecasts, ratings or targets herein constitutes a judgment as of the date of this report is published, and there is no assurance that future results or events will be consistent.

This report is not to be construed as an offer or a solicitation of an offer to buy or sell any securities or financial products. PTVSI and its associates, its directors, and/or its employees may from time to time have interests in the securities mentioned in this report or it may or will engage in any securities transaction or other capital market services for the company (companies) mentioned herein.

ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this report and certifies that the views about the companies including their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.

RESTRICTIONS ON DISTRIBUTION

By accepting this report, the recipient hereof represents and warrants that you are entitled to receive such report in accordance with the restrictions and agrees to be bound by the limitations contained herein. Neither this report nor any copy hereof may be distributed except in compliance with applicable Indonesian capital market laws and regulations.

Rating Table

Rating Remains	Buy
Target price Increased from IDR 1,285	IDR 2,100
Closing price 29 July 2025	IDR 1,395
Implied upside	+50.5%
Market Cap (USD mn)	1,689.7
ADT (USD mn)	1.4

Relative performance chart

Source: LSEG, Verdhana

M cap (USDmn)	1,689.7
Free float (%)	20.0
3-mth ADT (USDmn)	1.4

(%)	1M	3M	12M
Absolute (IDR)	45.3	38.8	114.6
Absolute (USD)	43.6	41.9	113.1
Rel to Jakarta Stock Exchange Composite Index	34.9	25.9	110.1

Research Analysts

Sandy Ham (sandy.ham@verdhana.id)

Samuel Christian (samuel.christian@verdhana.id)

Nicholas Goei (nicholas.goei@verdhana.id)

Tags: AGRI RELATED, TAPG, TAPG JK, TAPG IJ, Sandy Ham, Samuel Christian, Nicholas Goei

Triputra Agro Persada (TAPG IJ) (Buy) - Strong combination of higher price + productivity

Strong combination of higher price + productivity

Key data on Triputra Agro Persada

Fig. 1: ASEAN CPO peers comparison

Fig. 2: Indonesia CPO stock level

Fig. 3: Indonesia monthly CPO production, domestic consumption, and export trend

Fig. 4: Indonesia CPO demand

Fig. 5: TAPG — Forward P/E band

Fig. 6: TAPG — ROE trend

Rating Table

Relative performance chart

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Triputra Agro Persada (TAPG IJ) (Buy) - Strong combination of higher price + productivity

Fig. 1: ASEAN CPO peers comparison

Fig. 2: Indonesia CPO stock level

Fig. 3: Indonesia monthly CPO production, domestic consumption, and export trend

Fig. 4: Indonesia CPO demand

Fig. 5: TAPG — Forward P/E band

Fig. 6: TAPG — ROE trend

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