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In 3Q24, NSSS booked stellar results, with triple-digit growth both quarterly and annually, primarily driven by strong top-line as CPO ASP jumped to IDR 12,609/kg (+3.0% QoQ, +19.3% YoY). EBITDA margin saw positive growth to 57.1% on the back of the decline in fertilizer and maintenance costs to IDR 116bn (-19.5% YoY).
NSSS’ 3Q24 CPO production volume reached 28,394 tons (+20.1% QoQ, +12.4% YoY), supported by its second mill (opened in December 2023), bringing 9M24 CPO production to 27,007 tons, up +27.4% YoY. The addition of the second mill is expected to significantly raise average production capacity utilization rate for CPO and palm kernel oil from 60% to 80% in 2025, boosting future earnings growth.
Looking ahead, we believe NSSS may book even better results in 4Q24, due to Indonesia’s tight supply outlook, as the country plans to implement B40 in January 2025 and B50 in 2026.
We maintain our BUY recommendation on NSSS with TP of IDR 300 (DCF-based) reflecting 35.1x P/E 2025. Risks to our call include worse-than-expected non-CPO biofuel demand, particularly under Trump administration.
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
The company offers a variety of financial services, including equity, debt and derivative securities brokerage services, research and portfolio management, asset management and capital market services, as well as a range of other investment solutions. Samuel Sekuritas Indonesia is also a leader in providing financial education and training, and has established itself as a leading provider of investor relations services.
The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
In addition to its financial services, Samuel Sekuritas Indonesia also offers a range of other services, such as corporate finance and advisory services, mergers and acquisitions, and venture capital.
