Triputra Agro Persada (TAPG IJ) (Buy) - Strong profit upgrade

Strong profit upgrade

Maintain Buy with higher TP of IDR2,300

Expecting stronger CPO price trend

We revise up our ASP forecasts for TAPG by +3.5%/+3.0% y-y for FY25F/26F on the back of a stronger CPO price trend, driven by additional demand from B45 in 1H26F and B50 in 2H26F. We reckon that the incremental demand from Indonesia biodiesel expansion could contribute >50% of total additional global demand annually. In our view, B50 is feasible for implementation next year, given ample CPO fund budget (see Fig. 4), sufficient biodiesel capacity (at 19.6mn kilolitres vs B50 demand for 19.2mn kilolitres), and full government support aimed at reducing oil imports (main agenda of energy security program). We project CPO price hike of +20%/+5% in FY25F/FY26F, with a price level structurally above that for soybean oil (see Fig. 2 and 6).

Highly profitable with generous dividend

We calculate that TAPG’s cash cost is the lowest among peers in the upstream business (see Fig. 7), driven by high production yield (~14-year age profile) and efficient operations, in our view. This also explains TAPG’s superior fresh fruit bunch (FFB) production growth of +15% y-y in 1H25 (vs +6% average for peers). Thus, we expect TAPG to record better earnings growth than the industry. Furthermore, the company maintained a generous dividend payout ratios of 112%/98% in FY23/24 – it may potentially offer a 9% dividend yield for the FY25F book. The company delivers one of the highest dividend payouts among plantation firms, which helps boost its ROE to 32% in FY25F (highest among peers; see Fig. 1); this also signals strong corporate governance practices, in our view. Going forward, management plans to use more organic fertilizers to reduce costs and emission, which could further drive margin expansion.

Maintain Buy with higher TP, incorporating higher ASP and potential fine payment

We upgrade earnings by 8%/2% for FY25F/FY26F, given higher ASP assumptions and incorporating a potential fine from the use of forestry land in the FY26F book. We note the potential fine to be a one-off cost and hence, not substantial in our forecast; we still forecast TAPG’s FY26F NPAT to grow by +10% y-y. We rate the stockBuy with a higher TP of IDR2,300 (from IDR2,100), using a target P/E of 13x FY25F (unchanged, similar to ASEAN peers). We believe that CPO players deserve valuation re-rating given their expanding profitability and better predictability than other commodities. Given potential upside of 24% and dividend yield of 9.3%, TAPG’s TSR is at 33.3%. Downside risks would be the cancellation of biodiesel mandate expansion and unfavorable government intervention.

Year-end 31 Dec	FY24		FY25F		FY26F		FY27F
Currency (IDR)	Actual	Old	New	Old	New	Old	New
Revenue (bn)	9,671	10,695	11,010	11,660	11,940	11,822	12,106
Reported net profit (bn)	3,120	3,243	3,500	3,752	3,841	3,854	4,099
Normalised net profit (bn)	3,120	3,243	3,500	3,752	3,841	3,854	4,099
FD normalised EPS	157.19	163.38	176.33	189.00	193.52	194.17	206.50
FD norm. EPS growth (%)	94.0	3.9	12.2	15.7	9.8	2.7	6.7
FD normalised P/E (x)	11.8	–	10.5	–	9.6	–	9.0
EV/EBITDA (x)	8.5	–	7.3	–	6.4	–	6.2
Price/book (x)	3.4	–	3.3	–	3.2	–	3.1
Dividend yield (%)	8.3	–	9.3	–	10.2	–	10.9
ROE (%)	28.8	29.8	31.7	33.3	33.5	33.1	34.6
Net debt/equity (%)	net cash	0.7	net cash	net cash	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	11,010	11,940	12,106
Cost of goods sold	-6,109	-5,949	-6,638	-6,937	-6,953
Gross profit	2,217	3,723	4,373	5,003	5,153
SG&A	-875	-894	-998	-1,031	-1,050
Employee share expense	0	0	0	0	0
Operating profit	1,342	2,829	3,375	3,973	4,102
EBITDA	1,954	3,445	4,106	4,778	4,990
Depreciation	-612	-617	-731	-805	-887
Amortisation	0	0	0	0	0
EBIT	1,342	2,829	3,375	3,973	4,102
Net interest expense	-75	-11	-4	39	40
Associates & JCEs	643	894	1,034	1,062	1,069
Other income	30	216	8	-204	8
Earnings before tax	1,941	3,927	4,412	4,870	5,220
Income tax	-280	-686	-743	-838	-913
Net profit after tax	1,661	3,241	3,669	4,032	4,307
Minority interests	-53	-120	-169	-190	-208
Other items	0	0	0	0	0
Preferred dividends	0	0	0	0	0
Normalised NPAT	1,608	3,120	3,500	3,841	4,099
Extraordinary items	0	0	0	0	0
Reported NPAT	1,608	3,120	3,500	3,841	4,099
Dividends	-1,807	-3,057	-3,430	-3,764	-4,016
Transfer to reserves	-198	63	71	78	83
Valuations and ratios
Reported P/E (x)	22.9	11.8	10.5	9.6	9.0
Normalised P/E (x)	22.9	11.8	10.5	9.6	9.0
FD normalised P/E (x)	22.9	11.8	10.5	9.6	9.0
Dividend yield (%)	4.9	8.3	9.3	10.2	10.9
Price/cashflow (x)	17.7	9.7	8.9	8.0	7.4
Price/book (x)	3.4	3.4	3.3	3.2	3.1
EV/EBITDA (x)	14.4	8.5	7.3	6.4	6.2
EV/EBIT (x)	18.8	10.0	8.5	7.4	7.3
Gross margin (%)	26.6	38.5	39.7	41.9	42.6
EBITDA margin (%)	23.5	35.6	37.3	40.0	41.2
EBIT margin (%)	16.1	29.2	30.7	33.3	33.9
Net margin (%)	19.3	32.3	31.8	32.2	33.9
Effective tax rate (%)	14.4	17.5	16.8	17.2	17.5
Dividend payout (%)	112.3	98.0	98.0	98.0	98.0
ROE (%)	15.4	28.8	31.7	33.5	34.6
ROA (pretax %)	15.6	28.8	33.1	36.2	35.8
Growth (%)
Revenue	-10.9	16.2	13.8	8.4	1.4
EBITDA	-45.3	76.3	19.2	16.4	4.4
Normalised EPS	-46.1	94.0	12.2	9.8	6.7
Normalised FDEPS	-46.1	94.0	12.2	9.8	6.7
Source: Company data, Verdhana estimates

Cashflow statement (IDRbn)
Year-end 31 Dec	FY23	FY24	FY25F	FY26F	FY27F
EBITDA	1,954	3,445	4,106	4,778	4,990
Change in working capital	-139	55	-109	-60	-14
Other operating cashflow	266	292	125	-131	-3
Cashflow from operations	2,081	3,792	4,123	4,587	4,972
Capital expenditure	-802	-522	-1,163	-1,107	-1,281
Free cashflow	1,279	3,269	2,960	3,479	3,691
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	2,869	3,369	3,564
Cash dividends	-754	-1,807	-3,057	-3,430	-3,764
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	169	190	208
CF from financial acts	-1,894	-3,204	-2,998	-3,338	-3,646
Net cashflow	-951	302	-129	31	-81
Beginning cash	1,958	1,007	1,309	1,180	1,211
Ending cash	1,007	1,309	1,180	1,211	1,130
Ending net debt	114,304	-209	-190	-320	-328
Balance sheet (IDRbn)
As at 31 Dec	FY23	FY24	FY25F	FY26F	FY27F
Cash & equivalents	1,007	1,309	1,180	1,211	1,130
Marketable securities	0	0	0	0	0
Accounts receivable	108	291	322	344	348
Inventories	1,020	1,035	1,154	1,206	1,209
Other current assets	311	612	619	627	636
Total current assets	2,446	3,247	3,276	3,389	3,323
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	14,859	15,384	15,838
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	2,287	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	2,805
Minority interest	446	469	637	828	1,035
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	6,397	6,809	7,144
Proposed dividends	0	0	0	0	0
Other equity and reserves	-576	-467	-467	-467	-467
Total shareholders' equity	10,894	10,808	11,251	11,663	11,998
Total equity & liabilities	13,867	14,307	14,859	15,384	15,838
Liquidity (x)
Current ratio	1.25	1.37	1.40	1.48	1.49
Interest cover	17.9	246.5	758.5	–	–
Leverage
Net debt/EBITDA (x)	58.50	net cash	net cash	net cash	net cash
Net debt/equity (%)	1,049.2	net cash	net cash	net cash	net cash
Per share
Reported EPS (IDR)	81.02	157.19	176.33	193.52	206.50
Norm EPS (IDR)	81.02	157.19	176.33	193.52	206.50
FD norm EPS (IDR)	81.02	157.19	176.33	193.52	206.50
BVPS (IDR)	548.81	544.48	566.79	587.54	604.43
DPS (IDR)	91.01	154.02	172.77	189.62	202.34
Activity (days)
Days receivable	7.8	7.5	10.2	10.2	10.4
Days inventory	63.2	63.2	60.2	62.1	63.4
Days payable	36.9	38.1	38.1	38.4	38.9
Cash cycle	34.0	32.7	32.2	33.9	35.0
Source: Company data, Verdhana estimates

Company profileTAPG is a CPO produce and seller located in Indonesia. They can be split into two major holdings, AMP (95% ownership) and UTSP (50% ownership). They have 103k ha of plantation land under AMP and 57k ha of plantation land under UTSP.

Valuation MethodologyOur TP of IDR2,300 is derived from FY25F P/E of 13x, slightly higher than regional peers at 12x FY25F P/E (consensus).The benchmark index for this stock is the JCI Index

Risks that may impede the achievement of the target priceDownside risks would be the cancellation of biodiesel mandate expansion and unfavorable government intervention.

ESGTAPG are in the RSPO and ISPO, the two main ESG licensing for CPO.

Fig. 1: Comparison of ASEAN peers

TAPG has the highest ROE and dividend yield

Company	Bloomberg	M Cap	Rating	Target Price	Last Price	Upside	P/E (x)		P/B (x)		ROE (%)		Dividend Yield (%)
Company	Ticker	US$ mn		LC	13-Oct	(%)	FY25F	FY26F	FY25F	FY26F	FY25F	FY26F	FY25F	FY26F
Malaysia
SD Guthrie	SDG MK	8,655	Buy	5.80	5.29	10%	15.1	13.9	1.7	1.6	11.3	11.7	3.8	3.8
IOI Corporation	IOI MK	5,797	Buy	4.50	3.95	14%	16.5	16.5	2.0	1.9	12.2	11.8	3.3	3.5
Kuala Lumpur Kepong	KLK MK	5,380	Buy	23.00	20.42	13%	22.0	15.5	1.6	1.5	7.3	10.0	3.4	3.9
Genting Plantations	GENP MK	1,042	Not Rated	na	4.91	na	13.1	13.0	0.8	0.8	6.6	6.4	5.2	4.6
United Plantations	UPL MK	3,444	Not Rated	na	23.40	na	18.4	18.3	5.2	5.0	28.3	27.3	na	na
Johor Plantations Group	JPG MK	863	Not Rated	na	1.46	na	12.9	12.7	1.2	1.2	9.6	9.2	4.0	3.9
Sarawak Oil Palms	SOP MK	718	Not Rated	na	3.39	na	7.0	7.1	0.7	0.7	11.1	10.4	3.7	3.2
Average							15.0	13.8	1.9	1.8	12.3	12.4	3.9	3.8
Singapore
Wilmar International	WIL SP	13,907	Neutral	3.20	2.89	11%	9.3	8.6	0.7	0.6	7.5	13.1	7.2	7.6
Golden Agri-Resources	GGR SP	2,884	Not Rated	na	0.30	na	na	na	na	na	na	na	na	na
First Resources	FR SP	2,042	Not Rated	na	1.71	na	7.6	7.8	1.3	1.2	19.1	17.3	6.0	5.5
Average							8.4	8.2	1.0	0.9	13.3	15.2	6.6	6.6
Indonesia
Triputra Agro Persada	TAPG IJ	2,239	Buy	2,300	1,865	23%	10.9	9.9	3.4	3.3	31.7	33.5	9.0	9.9
Dharma Satya Nusantara	DSNG IJ	1,106	Not Rated	na	1,730	na	9.2	9.2	1.5	1.3	17.2	15.0	2.1	3.1
London Sumatera	LSIP IJ	553	Not Rated	na	1,350	na	6.4	8.3	0.7	0.6	10.0	8.2	5.6	6.1
Astra Agro Lestari	AALI IJ	908	Not Rated	na	7,825	na	11.7	11.9	0.6	0.6	5.4	5.2	3.3	4.1
Average							9.7	9.8	1.6	1.5	15.6	15.4	4.9	5.8

Note: Estimates for Not Rated companies are Bloomberg consensus estimates.
Source: Company data, Bloomberg Finance L.P., Verdhana estimates

Fig. 2: Global CPO stock level vs price forecast

We project for a gradual CPO stock erosion as demand growth outperform supply growth

Source: GAPKI, Verdhana estimates

Fig. 3: Global CPO stock level vs. price forecast

We project a gradual CPO stock erosion as demand growth outperform supply growth

Source: GAPKI, Verdhana estimates

Fig. 4: Indonesia CPO fund (BPDPKS) budget estimate

Removal of non-PSO subsidy helps to sustain biodiesel mandate expansion

IDR tn	2021	2022	2023	2024	2025F (B40)	2026F (B45)	2027F (B50)
Beginning Balance	9.6	25.7	25.1	37.6	35.4	42.8	35.2
Revenue	72.5	35.7	34.6	28.4	60.1	58.0	72.6
Biodiesel Expenditure	(52.0)	(34.7)	(18.3)	(29.4)	(50.4)	(63.3)	(72.4)
Other Expenditures	(1.5)	(1.6)	(2.6)	(2.3)	(2.3)	(2.3)	(2.3)
Surplus	19.0	(0.6)	13.7	(3.3)	7.4	(7.6)	(2.1)
Adjustment	(2.9)	-	(1.2)	1.1	-	-	-
Ending Balance	25.7	25.1	37.6	35.4	42.8	35.2	33.1

Assumption
Biodiesel consumption growth (%)					3.0	3.0	3.0
Subsidy spread (IDR)					6,000	6,500	6,800
CPO price (USD/ton)					1,300	1,400	1,450
USD/IDR					16,500	16,500	16,500
Levy rate (%)					10.0	10.0	12.5

Source: GAPKI, Verdhana estimates

Fig. 5: Indonesia biodiesel mandate drives global demand

Indonesia biodiesel mandate expansion significantly contributes to additional global demand

Source: GAPKI, Verdhana estimates

Fig. 6: CPO vs soybean oil vs Brent oil price index (Jan-16 = 100)

We expect CPO to maintain its premium price level, backed by favorable supply and demand dynamic

Source: Bloomberg Finance L.P., Verdhana research

Fig. 7: CPO firms’ cash cost comparison (USD/ton)

TAPG has the highest yield and operational system

Source: Company data, Verdhana research

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 2,100	IDR 2,300
Closing price 13 October 2025	IDR 1,855
Implied upside	+24.0%
Market Cap (USD mn)	2,224.5
ADT (USD mn)	2.2

Relative performance chart

Source: LSEG, Verdhana

M cap (USDmn)	2,224.5
Free float (%)	20.0
3-mth ADT (USDmn)	2.2

(%)	1M	3M	12M
Absolute (IDR)	22.0	62.0	108.4
Absolute (USD)	20.7	58.6	96.1
Rel to Jakarta Stock Exchange Composite Index	16.9	44.8	98.6

Research Analysts

Sandy Ham (sandy.ham@verdhana.id)

Samuel Christian (samuel.christian@verdhana.id)

Tags: AGRI-RELATED, Triputra Agro Persada, TAPG, TAPG JK, TAPG IJ, Sandy Ham, Samuel Christian

Triputra Agro Persada (TAPG IJ) (Buy) - Strong profit upgrade

Strong profit upgrade

Key data on Triputra Agro Persada

Fig. 1: Comparison of ASEAN peers

Fig. 2: Global CPO stock level vs price forecast

Fig. 3: Global CPO stock level vs. price forecast

Fig. 4: Indonesia CPO fund (BPDPKS) budget estimate

Fig. 5: Indonesia biodiesel mandate drives global demand

Fig. 6: CPO vs soybean oil vs Brent oil price index (Jan-16 = 100)

Fig. 7: CPO firms’ cash cost comparison (USD/ton)

Rating Table

Relative performance chart

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Triputra Agro Persada (TAPG IJ) (Buy) - Strong profit upgrade

Fig. 1: Comparison of ASEAN peers

Fig. 2: Global CPO stock level vs price forecast

Fig. 3: Global CPO stock level vs. price forecast

Fig. 4: Indonesia CPO fund (BPDPKS) budget estimate

Fig. 5: Indonesia biodiesel mandate drives global demand

Fig. 6: CPO vs soybean oil vs Brent oil price index (Jan-16 = 100)

Fig. 7: CPO firms’ cash cost comparison (USD/ton)

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