Core Viewpoint - Indonesia plans to increase crude palm oil (CPO) production from 48.2 million tons in 2024 to 60 million tons by 2030 in response to rising demand in food, biofuels, and oleochemical sectors [1] Group 1: Production Goals and Challenges - The Indonesian Palm Oil Association (Gapki) indicates that due to aging plantations, CPO and palm kernel oil (PKO) production is expected to see a modest increase of 1.7% to 53.6 million tons by 2025 [1] - Aging palm oil plantations are causing stagnation in CPO production growth, which is gradually pushing prices higher [1] Group 2: Market Dynamics - Recent increases in palm oil prices have drawn market attention, with the Indonesian President announcing a crackdown on illegal resource extraction [1] - Government investigations have revealed the seizure of 3.1 million hectares of illegal palm oil plantations, contributing to supply tightening and concerns over export restrictions, which support the strengthening of international palm oil prices [1]

Investment Rating - The report maintains a "Buy" rating for the company [4][36]. Core Viewpoints - The company is entering a new growth phase driven by the completion of the Dukuda expansion project and improved profitability [3][35]. - The Dukuda base has significant tariff advantages, with profitability positively correlated to palm oil prices [1][15]. - Stable supply combined with growing demand is expected to push palm oil prices higher, benefiting the company's profitability [2][33]. Summary by Sections 1. Tariff Advantages and Profitability - The Dukuda base in Indonesia benefits from high export tariffs on crude palm oil while facing no tariffs on refined products, leading to a competitive cost advantage [1][15]. - Historical performance shows a clear positive correlation between the company's earnings and palm oil prices, with higher prices leading to increased profitability [16]. 2. Supply and Demand Dynamics - Indonesia's palm oil production is stabilizing due to slowed planting area growth and aging trees, which is expected to maintain overall production levels [2][28]. - Demand for palm oil is supported by food consumption and industrial uses, particularly in biodiesel, with significant growth expected in regions like India and Southeast Asia [30][33]. 3. Dukuda Expansion Project - The Dukuda expansion project, with an investment of 248 million yuan, is progressing towards full production, which is anticipated to significantly enhance the company's performance [3][35]. 4. Profit Forecast and Valuation - The company is projected to achieve net profits of 399 million, 540 million, and 662 million yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.85, 1.15, and 1.41 yuan [4][36]. - The current price corresponds to P/E ratios of 11.99, 8.85, and 7.22 for the same years, indicating a favorable valuation outlook [4][36].