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BWPT 1H-2026
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Avanza Bagus Aditya
BUY
Last Price
IDR 85
Target Price
IDR 110
Upside
29.41%
Investment Considerations
Revenue Growth and Higher Production Support Earnings
BWPT delivered a solid performance in 1H26, with net sales increasing 17.15% YoY to IDR3.26 trillion. EBITDA rose 10.25% YoY to IDR956.2 billion, maintaining a stable EBITDA margin of 27.20% despite input cost pressures. Net profit increased 22.87% YoY to IDR211.2 billion, compared with IDR172.9 billion in 1H25. Although EBITDA growth lagged revenue growth, this was driven by continued mature upkeep spending to ensure long-term palm tree productivity. We expect earnings growth to continue in FY2026, forecasting net profit growth of 19.45% YoY to IDR432 billion, supported by a net profit margin of 6.76% and an EBITDA margin of 28.95%.
Higher Production Volumes Supported by Mill Expansion
BWPT’s operational performance continued to improve in 2Q26, supported by higher production volumes and additional milling capacity. Fresh fruit bunch (FFB) processing volume reached approximately 350,000 tonnes in 2Q26, broadly unchanged from 2Q25. Nevertheless, CPO production increased 11.29% YoY to 80,599 tonnes from 72,423 tonnes, while palm kernel (PK) production rose 17.07% YoY to 16,226 tonnes from 13,861 tonnes. The increase in output was supported by higher mill utilisation following the expansion of palm oil milling capacity by 30 tonnes per hour in East Kalimantan. Management’s initiative to expand its independent plasma network is also expected to strengthen the availability of FFB supply. Looking ahead, we forecast FY2026 CPO production of approximately 291,100 tonnes and PK production of 57,600 tonnes. These represent increases of approximately 1.4% and 4.4% YoY, respectively, supporting further revenue growth.
Midstream Integration Offers Additional Growth Opportunities
BWPT is strengthening its midstream operations through the development of a kernel crushing plant (KCP) in Central Kalimantan, with processing capacity of 200 tonnes per day. The facility will enable the company to process palm kernels into higher-value derivative products, increasing its participation in the palm oil value chain. The project is being integrated with a 1.5 MW biogas power plant (PLTBg), which will convert palm oil mill effluent (POME) into renewable energy for operational use. Commercial operations are targeted to begin in 1Q27. We view these investments positively, as additional processing capacity should improve product diversification, while the biogas facility could reduce energy costs and improve operating efficiency. Although the financial contribution will depend on utilisation rates and operating costs, the integrated facilities should support BWPT’s longer-term earnings potential and provide opportunities for margin improvement.
Valuation: Maintain BUY, TP IDR110 (+29.41% Upside)
We maintain our BUY recommendation for BWPT with a 12-month target price of IDR110 per share, representing approximately 29.41% upside from the reference share price of IDR85. Our target price implies a 4.1x FY26F EV/EBITDA, based on a 70:30 weighted combination of DCF and relative valuation methodologies. This approach reflects the company’s earnings growth potential while allowing for market uncertainty following the recent MSCI announcement. We see two additional catalysts supporting our positive outlook. First, the elimination of BWPT’s accumulated deficit through a quasi-reorganisation has removed an accounting obstacle to future dividend distributions, although any dividend payment will remain subject to profitability, cash availability and the necessary approvals. Second, the expansion of milling capacity and the development of integrated midstream facilities should support higher production, operating efficiency and earnings growth. We forecast net profit to increase from IDR362 billion in 2025 to IDR432 billion in 2026F and IDR491 billion in 2027F. We therefore maintain our BUY recommendation, supported by improving production volumes, continued earnings growth and the potential benefits of midstream integration.
Disclaimer:
PT Binaartha Sekuritas has compiled this report in good faith, using information believed to be reliable. PT Binaartha Sekuritas and its analyst take no responsibility for the accuracy of the information contained in this report. This report has been produced for distribution to clients of PT Binaartha Sekuritas only. This report is not an invitation to buy or sell any security. PT Binaartha Sekuritas may have used the information in this report prior to publication. The company or its clients may have positions in or may from time to time buy or sell the securities mentioned in this report or other related securities.