CPO price reach new highs: further re-rating potential. Indonesia’s biodiesel program continues to play a pivotal role in maintaining high CPO prices, allowing for YTD 2025 average price to rise +2.6% YoY to MYR 4,308/ton, following strong +10.1% YoY increase in 2024 (Figure 7). However, biodiesel demand represents only the tip of the iceberg, as the industry continues to grapple with tight supply conditions stemming from declining FFB yields in both Indonesia and Malaysia, the world’s two largest producers. The yield deterioration stems mainly from aging plantations and slow progress in replanting programs (Figure 8). This issue is further exacerbated by shrinking plantation areas in Malaysia, where several estates have been converted for property development. Our discussions with industry players also revealed that no new HGU permits have been issued in recent years, pushing companies to expand through acquisitions instead. Our findings indicate that acquisition costs have surged from USD 5–8k/ha to USD 13–15k/ha (Figure 10).

Profit surge driven by higher ASP and sales volumes. NSSS booked +16% QoQ / +41% YoY increase in revenue to IDR 545bn, supported by robust CPO sales of IDR 459bn (+17% QoQ / +35% YoY) and PK sales of IDR 85bn (+11% QoQ / +91% YoY). CPO volumes rose +14% QoQ / +22% YoY to 33k tons, driven by a young plantation profile (average age: 10.5 years) and higher ASP of IDR 13,923/kg (+3% QoQ / +10% YoY) following the B40 mandate. PK volumes also improved +16% QoQ / +38% YoY to 7k tons, although ASP declined -5% QoQ, but up +39% YoY to IDR 11,552/kg. Cumulatively, 9M25 revenue jumped +56% YoY to IDR 1.5tn, in line with our projection (77% of FY25F). On the bottom line, NSSS posted exceptional 3Q25 earnings of IDR 240bn (+58% QoQ), lifting 9M25 net profit to IDR 554bn (+309% YoY), accounting for 77% of our revised-up FY25F bottom line of IDR 715bn (Figure 2).

Upgrade TP to IDR 650 on higher earnings; reiterate BUY. We upgrade earnings by +2.2% in 2026F and +15.0% in 2027F and expect a sector re-rating in the near term, supported by: (1) new equilibrium in higher CPO prices, and (2) rising acquisition cost/ha amid ongoing moratorium land-expansion. Our BUY rating is retained with higher TP of IDR 650, implying 2026F EV/planted area of USD 30,943/ha. Key risks: weaker CPO prices, potential regulatory shifts, and adverse weather conditions.