JAKARTA - A number of plantation and palm oil processing issuers were highlighted at the beginning of this year, because they have solid business and market fundamentals.

Several issuers from the plantation and palm oil processing sector even recorded quite rapid growth in the nine months (9M) of 2024 yesterday, according to PT Ina Sekuritas Indonesia's research.

Issuers such as  PT Dharma Satya Nusantara Tbk (DSNG) recorded a net profit of IDR 860.5 billion in 9M 2024, growing 71% yoy. This growth was supported by sales performance which reached IDR 7.2 trillion, up 9% yoy.

In addition, the decline in fertiliser prices and the increase in the average selling price (ASP) of crude palm oil (CPO), were positive sentiments for DSNG's performance.

On the other hand, DSNG has also recently strengthened its business in renewable energy, by exporting 84,000 tonnes of palm kernel shell (PKS) to Japan.

CPO producers such as PT Triputra Agro Persada Tbk (TAPG) also recorded a fairly solid performance, with net profit growth of 46% yoy in 9M 2024. The increase in CPO ASP, which reached 19.8%, supported TAPG's net profit growth in this period.

Meanwhile, CPO producers such as PT Tunas Baru Lampung Tbk (TBLA) and PT Sumber Tani Agung Resources Tbk (STAA) recorded an increase in net profit of 2% yoy and 69% yoy respectively in 9M 2024. TBLA's performance growth was supported by the diversification of its sugar and CPO businesses, while STAA's growth was supported by a number of expansion strategies.

‘We recommend BUY for DSNG (TP: IDR1,150), TAPG (TP: IDR875), TBLA (TP: IDR850), and STAA (TP: IDR1,000),’ wrote Ina Sekuritas Indonesia, in its research.

The recommendation, according to Ina Sekuritas Indonesia, is supported by solid profit growth from each issuer, as well as operational efficiency and expansion initiatives. (KR/LM)

Check out the full report here!