Company Coverage
Dharma Satya Nusantara (DSNG IJ): High-yielding Assets At An Attractive Valuation
NOT RATED
Current price:
Target price:
Upside:
Rp1,710
n.a.
n.a.
Analyst
Analyst
Highlights
- DSNG operates one of the most productive estate bases among listed Indonesian planters. It remains constructive on the 2H26 outlook, supported by firm production and favourable CPO price trends. Consensus expects full year profit growth of 27% (+9.4% in 1H26).
- GAPKI expects El Niño to cut industry production by 8-10% in 2027, though the company expects firm CPO prices to cushion the impact.
- It currently trades at just 8x 2026 PE, based on consensus (vs regional avg of 15x) and Rp184m/ha (US$10,400/ha).
Analysis
- Dharma Satya Nusantara (DSNG) operates one of the most productive estate bases among listed Indonesian planters, delivering a 23.5% OER in 1H26 and 21.4t/ha FFB yield in 2025, underpinned by a relatively young average tree age of around 15 years. As of 1H26, 95% of its 111,900ha planted area was mature, with >60,000ha concentrated in a single contiguous block in East Kalimantan, supporting operating efficiency. DSNG also has an integrated milling network of 12 mills with 675 tonnes FFB/hour capacity, alongside a 400tonnes/day kernel crushing plant, with 10 mills RSPO-certified and 11 ISPO-certified. The company remains family-controlled, with the TP Rachmat and Oetomo families holding 30.7% and 29.2%, respectively. Palm oil accounted for 90% of 1H26 revenue, with wood products and renewable energy contributing 8% and 2%, respectively.
- Production and prices both supportive into year-end. DSNG expects 2H26 production to grow around 3% yoy, supported by firm demand following the B50 implementation and resilient CPO prices. DSNG’s CPO and PKO ASPs were already up 3% yoy and 9% yoy, respectively, in 1H26, while management expects prices to remain supportive. CPO has continued to trend up, with Nov 26 futures at RM4,973/tonne (~15% above the 1H26 average). Consensus expects profit growth of 27% yoy (1H26 profit up 9.4% yoy). On the cost side, fertiliser accounts for around 25% of total costs, with prices expected to rise around 15% in the next fertilisation cycle, likely putting upward pressure on costs from 4Q26-1Q27.
- Then how about El Niño risks next year? The super El Niño is expected to occur in 4Q26-1H27, with BMKG forecasting Java, West Kalimantan and South Kalimantan to experience the most severe drought conditions. While DSNG is not immune to the impact, its estates are mainly located in East Kalimantan, where the company expects the impact to be milder. GAPKI forecasts industry production to decline 8-10% (4m-5m tonnes) in 2027.
Highlights
- DSNG operates one of the most productive estate bases among listed Indonesian planters. It remains constructive on the 2H26 outlook, supported by firm production and favourable CPO price trends. Consensus expects full year profit growth of 27% (+9.4% in 1H26).
- GAPKI expects El Niño to cut industry production by 8-10% in 2027, though the company expects firm CPO prices to cushion the impact.
- It currently trades at just 8x 2026 PE, based on consensus (vs regional avg of 15x) and Rp184m/ha (US$10,400/ha).
Analysis
- Dharma Satya Nusantara (DSNG) operates one of the most productive estate bases among listed Indonesian planters, delivering a 23.5% OER in 1H26 and 21.4t/ha FFB yield in 2025, underpinned by a relatively young average tree age of around 15 years. As of 1H26, 95% of its 111,900ha planted area was mature, with >60,000ha concentrated in a single contiguous block in East Kalimantan, supporting operating efficiency. DSNG also has an integrated milling network of 12 mills with 675 tonnes FFB/hour capacity, alongside a 400tonnes/day kernel crushing plant, with 10 mills RSPO-certified and 11 ISPO-certified. The company remains family-controlled, with the TP Rachmat and Oetomo families holding 30.7% and 29.2%, respectively. Palm oil accounted for 90% of 1H26 revenue, with wood products and renewable energy contributing 8% and 2%, respectively.
- Production and prices both supportive into year-end. DSNG expects 2H26 production to grow around 3% yoy, supported by firm demand following the B50 implementation and resilient CPO prices. DSNG’s CPO and PKO ASPs were already up 3% yoy and 9% yoy, respectively, in 1H26, while management expects prices to remain supportive. CPO has continued to trend up, with Nov 26 futures at RM4,973/tonne (~15% above the 1H26 average). Consensus expects profit growth of 27% yoy (1H26 profit up 9.4% yoy). On the cost side, fertiliser accounts for around 25% of total costs, with prices expected to rise around 15% in the next fertilisation cycle, likely putting upward pressure on costs from 4Q26-1Q27.
- Then how about El Niño risks next year? The super El Niño is expected to occur in 4Q26-1H27, with BMKG forecasting Java, West Kalimantan and South Kalimantan to experience the most severe drought conditions. While DSNG is not immune to the impact, its estates are mainly located in East Kalimantan, where the company expects the impact to be milder. GAPKI forecasts industry production to decline 8-10% (4m-5m tonnes) in 2027.
NOT RATED
Current price:
Target price:
Upside:
Rp1,710
n.a.
n.a.
Analyst
Analyst
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