STAA is a fully integrated palm oil company with 49k hectares of planted land across North & South Sumatra and Kalimantan. The plantation profile is relatively young, with an average tree age of 14 years—74.3% in prime stage (8–20 years), 9.4% mature (>20 years), and 10% immature. Productivity remains superior, with combined FFB yields of 23.41 tons/ha and 23.98 tons/ha for nucleus estates, above the industry average of ~19–20 tons/ha. Operations are supported by 10 palm oil mills (450 TPH), a kernel crushing plant (600 TPD), a solvent extraction plant (500 TPD), and a downstream refinery & fractionation facility (2,000 TPD), making STAA fully integrated from upstream to downstream.

CPO production is expected to remain stable in 2H25F under neutral climatic conditions, with an 82% ENSO-neutral probability through August and 48% into winter, maintaining consistent rainfall in Southeast Asia. A major supply rebound appears limited, given structural headwinds in Indonesia and Malaysia such as stagnant output, aging trees, and slow replanting. On pricing, global CPO has averaged USD 972/MT as of mid-September, while price spreads have narrowed due to India’s restocking ahead of Diwali and lower import tariffs, offering modest price support.

We project FY25E revenue of IDR 8.38 trillion (+30.1% YoY), underpinned by stronger volumes, improved ASP, and incremental downstream contribution from the refinery (olein ~IDR 4.43 trillion, stearin ~IDR 838 billion, RBDPO ~IDR 99 billion, PFAD ~IDR 205 billion). Gross profit is forecast at IDR 2.23 trillion (+1.98% YoY) with ~27% margin, initially weighed by external CPO purchases (IDR 1.12 trillion) and new plant ramp-up. Margins are expected to expand to 28–29% in FY26–FY27F as internal feedstock utilization improves. Net profit FY25E is estimated at IDR 1.33 trillion (+3.6% YoY) with a 16% net margin, rising to IDR 1.64 trillion (+23.7% YoY) and ~18–19% margin in FY26F–FY28F as downstream operations scale.

We initiate coverage with a BUY recommendation and a target price of IDR 1,400/share, implying PER of 11.5x/9.3x and PBV of 2.5x/2.1x for FY25E/FY26F, using a DCF approach (WACC 11.5%; TG 2.5%). The stock currently trades at an EV/ha of IDR 299 million, above the industry average of IDR 162.9 million—reflecting its younger plantation profile, high productivity, low replanting needs, and growing downstream integration.

We view STAA as attractive due to: (1) productive plantation age averaging 14 years, (2) core estate yields near 24 tons/ha, (3) new Riau refinery enhancing value capture, and (4) a healthy balance sheet with low leverage to support measured growth.

Key downside risks include: (1) global CPO price volatility, (2) weather-related yield disruptions, (3) fertilizer price fluctuations, and (4) regulatory changes on biodiesel mandates or export taxes.

By PHINTRACO SEKURITAS | Research
–Disclaimer On–