1Q25: Strong pesticide sales backed by rainy weather. In 1Q25, DGWG’s pesticide revenue (36% of total) rose +18.2% YoY to IDR 291.4bn, driven by higher sales volumes of 3.5mn kg (+17.6% YoY) and ASP of +0.5% YoY to IDR 82,839/kg amid rainy season which has the propensity to raise pest problems for farmers. Fertilizer sales volumes also moved upward +12.7% YoY to 103mn kg, though ASP slipped -5.6% to IDR 4.7k/kg, resulting in fertilizer revenue of IDR 494.4bn (+6.3% YoY, 62% of sales). DGWG’s overall top line increased +9.8% YoY to IDR 803bn, while net profit surged +57.7% YoY to IDR 25.9bn, helped by lower opex to sales and tax rate. Thus, DGWG’s bottom line accounted for 12% of our FY estimate (vs. 9.2% in 2024), slightly higher than our expectation. Wet summer should also support earnings in 2Q25 as we expect DGWG’s pesticide and fertilizer sales volume growth to exceed 15% YoY in 2Q25F. Looking ahead, DGWG’s full-year 25F revenue should be well supported as top-line is typically concentrated in 2H on rain intensity peaking during this period.

Double capacity = 2025-29F revenue CAGR of 15%. DGW’s short-to-medium-term growth story will hinge on the expansion of its biggest revenue contributor, fertilizer, with plans to install three new plants in Sumatera through 2029F, more than doubling annual production capacity to 700k tons from currently 300k. Additionally, DGWG plans to start producing methomyl (active ingredient for pesticide) in 2H25 with production capacity of 3.3k tons. Crucial for methomyl production used in pesticides, DGWG will soon open a new carbamation plant in Cikande, Banten, able to produce 792 tons of methomyl, allowing higher pesticide margin and new export and B2B markets. Backed by additional capacities and operating efficiencies, DGWG should not only achieve strong 2025-29F revenue CAGR of 18%, but also see double-digit EBITDA margin and CAGR of 17.7% over the same period.

Initiate with BUY and IDR 550 TP. Led by David Yaory as owner and CEO, DGWG, focusing on mass-market products for deep-rural small-scale farmers, experienced exponential growth and near tripling in size with revenue growth from IDR 1.2tn in 2019 to IDR 3.4tn in 2024. Supported by strong infrastructure and an extensive supply chain, we project growth to persist averaging +17.4% YoY for FY25-26F top-line and EPS expansion exceeding 20%. To determine DGWG’s valuation, we apply 5-year DCF model with 9.8% WACC and terminal growth rate of 2.0%. Our model yields valuation of IDR 3tn, reflecting target price of IDR 550/share, implying 29.7% upside. BUY. Key risks: drier weather than expected, lower purchasing power, and slower expansion.