TAPG posted solid top-line growth in 2Q25, driven by strong performance in the CPO, PK, and PKO segments. Revenue reached IDR 2.89 trillion (+10.2% QoQ; +33.4% YoY), mainly from CPO at IDR 2.34 trillion (+7.1% QoQ; +24.4% YoY) with sales volume of 168k tons (+11.7% QoQ; +12.6% YoY) despite a slight ASP decline to IDR 13,895/kg (-4.1% QoQ; +10.5% YoY). The PK segment contributed IDR 348 billion (+13.6% QoQ; +94.9% YoY), while PKO also performed well with 6.6k tons (+50.0% QoQ; +20.0% YoY) and ASP rising to IDR 26,451/kg (+7.6% QoQ; +64.1% YoY).

Profitability improved as COGS was well-managed, standing at IDR 1.76 trillion (+3.3% QoQ; +22.6% YoY), driven by higher raw material costs of IDR 1.23 trillion (+10.0% QoQ; +35.5% YoY) and external FFB purchases of 338k tons (+9.0% QoQ; +18.8% YoY). Gross profit reached IDR 1.12 trillion (+23.3% QoQ; +55.5% YoY), while net profit was IDR 889 billion (+10.4% QoQ; +49.3% YoY) with net margin improving to 30.8%. Earnings from associates of IDR 272 billion (+4.8% QoQ; +37.7% YoY) also supported the bottom line.

TAPG 1H25 strong results prompt upward revisions: FY25F/FY26F revenue +4.8%/+7.3%, EBITDA +5.9%/+7.9%, NP +5.5%/+9.6%. CPO prices seen stable at MYR4,200–4,500/MT, while higher PK & PKO ASPs boost margins.

We maintain our BUY recommendation with an increased target price of IDR 1,700/share, implying P/E of 9.2x/8.3x and P/BV of 2.8x/2.6x for FY25F/FY26F.

We view TAPG as still attractive due to: (1) a relatively young plantation profile (blended age: 14.2 years) with stable productivity prospects, (2) a consistent dividend track record (DPR AVG-3Y: >50%), and (3) a healthy and solid balance sheet with DER <1x

Key downside risks : (1) global CPO and edible oil price volatility, (2) unfavorable government regulations, and (3) weather disruptions affecting plantation productivity.

By PHINTRACO SEKURITAS | Research
-Disclaimer On-