Growth support from elevated CPO prices and planting program. In 2H25 and beyond, we expect NSSS to continue benefiting from elevated CPO prices, driven by persistent demand from biodiesel program and seasonal festive consumption (e.g., Diwali). Note that average CPO price in the past 2 months (Jul-Aug25) reached MYR 4,254/ton, up +5.4% vs 2Q25 average. On the volume front, monthly FFB and CPO production should also remain strong post seasonal trough in 1H25. Beyond these near-term tailwinds, management is also laying the groundwork for longer-term growth. The company plans to monetize its greenfield assets with new plantings at BSSU (starting in 2025) and continued development at PMM this year. This initiative is expected to add 1,500–2,000 ha per annum over the next seven years, reinforcing NSSS’s medium-term volume growth trajectory.

Stellar 2Q25 earnings on strong volumes and margins. NSSS reported 61% YoY hike in 2Q25 topline to IDR 470bn driven by strong CPO sales of IDR 393bn (+52% YoY) and PK sales of IDR 77bn (+140% YoY). Higher CPO sales saw 37% YoY jump in volume to 29k tons, thanks to young plants (avg. age: 10.7 years) and elevated CPO ASP of IDR 13,554/kg (+11% YoY) on B40 policy. For PK, volumes rose 40% YoY to 6.3k tons with ASP soaring to IDR 12,128/kg (+71% YoY) due to global coconut shortage, making PK a substitute. 6M25 revenue grew 61% YoY to IDR 947bn, in line with our estimate (47%). On the cost side, 2Q25 fertilizer, plant maintenance, and harvesting costs fell 39% YoY to IDR 741/kg, boosting GPM to 55% (2Q24: 27%). On its bottom line, NSSS reported exceptional 2Q25 performance with 830% YoY growth to IDR 152bn, bringing 1H25 net profit to IDR 314bn (+1,323% YoY, 48% of our FY25 estimate) backed by lower tax rate of 20% (1H24: 43%) and higher interest income of IDR 14bn (+156% YoY).

Maintain TP at IDR 550 with BUY rating. We set our DCF-based TP at IDR 550 for NSSS (WACC: 10.8%; terminal growth: 4.0%), implying 2026F EV/mature area of USD 29,824. Our positive view is also based on sector-wide re-rating driven by: 1) limited new planting opportunities; 2) tightening supplies amid rising biodiesel demand, signaling structural shift in industry dynamics; 3) constraints from increasingly restrictive HGU (Hak Guna Usaha) permit approvals. BUY. Risks to our call: weaker-than-expected CPO prices, regulatory changes, and adverse weather.