■ Robust 1Q25 results driven by strong price environment and prime-age profile. TAPG, Indonesia’s fifth largest listed CPO company by hectarage, reported strong 1Q25 earnings of IDR 805bn (-46.4% QoQ, +117.2% YoY) on sales of IDR 2.6tn (-23.6% QoQ, +37.0% YoY). The stellar performance was supported by stable CPO sales volumes of 150.9k tons (-24.0% QoQ, +4.0% YoY) which all sold locally coupled with higher ASP of IDR 14,493/kg (-2.0% QoQ, +22.0% YoY).

 

■ Higher CPO price ahead as positive catalyst; @1% hike in CPO price = 2.2% rise in NP. We project CPO price to average MYR 4,000/mt in 2025F (+3.6% YoY, -13.4% YTD), supported by favorable domestic conditions in terms of supplies, demand, and pricing. National output is expected to grow +1.5% YoY to 49.2 million tons, constrained by aging trees and limited replanting (<150k ha/year). Domestic consumption is projected to rise 4.5% YoY to 21.5 million tons, driven by food demand and B35 program (11.2mn kl, +5.7% YoY).

 

■ Strong cash level ensures replanting, sustainable growth, and high-dividend payouts. Supported by FFB yield average of 23.5 tons/ha and OER of 23.1%, TAPG's 2025 net earnings will reach IDR 3.4tn (+10.3% YoY), paving the way for robust cash balance of IDR 1.9tn, with net cash position and projected free cash flow of IDR 2.4tn.

■ BUY - IDR 1,400 DCF-based TP (+43.6% upside) on strong local CPO demand. We retain our BUY on TAPG with TP of IDR 1,400 (+43.6% upside), reflecting attractive 2026F P/E of 7.7x, still at 41.5% discount to the sector.