Company Coverage
Eagle High Plantations (BWPT IJ): On The Verge Of A Turnaround
NOT RATED
Current price:
Target price:
Upside:
Rp127
n.a.
n.a.
Analyst
Analyst
Highlights
- Net gearing fell to 1.5x in 1H26 from a 3.5x peak in 2021, with a quasi-reorganisation completed in 2Q26. Earnings momentum remains intact, with the company guiding for about 20% net profit growth in 2026.
- Management expects FFB yield to improve as higher-density plantings from three years ago mature, with replanting starting next year. Its first kernel crushing plant, due 2Q27, is expected to contribute around 10% of revenue.
- While it trades at EV/ha of Rp101m (half the sector average), the company has multiple growth levers ahead, a cleaner balance sheet, and initiatives underway to address its ageing estate and low yield.
Analysis
- Eagle High Plantations (BWPT) is undergoing a turnaround restructuring process. Ever since the Rajawali Group took over in 2014, the landbank has expanded nearly 4.4x to 416,006 ha (only 147,263ha of that was planted). Heavy losses followed through 2019-21 (Rp1.4t net loss in 2021). The company has since divested scattered subsidiaries and estates, cutting the landbank to around 157,000 ha, while net gearing fell to 1.5x in 1H26 from a 3.5x peak in 2021 and interest coverage improved to about 3x. A quasi-reorganisation in 2Q26 cleared the accumulated deficit, raising the possibility for dividend payment. What remains is 84,000 ha planted across Kalimantan (~90% of revenue), Papua and Sumatra, with seven mills (400 MT/hour, five RSPO-certified, targeting 100% by 2027) and 94,000 MT of storage.
- Earnings momentum intact. The company guides for net profit growth of around 20% yoy in 2026, implying Rp470b, on about 1.3m tonnes of FFB processed (+6% yoy) and higher CPO prices. CPO has continued to trend up, with Nov 26 futures at RM4,940/tonne (~14% above the 1H26 average). In 1H26, revenue rose 17% yoy to Rp3.26t and net profit grew 23% yoy to Rp211b, on higher CPO ASP (+3.6% yoy) and sales volume (+14% yoy). Note that own FFB production fell 5% yoy to 510,233 tonnes, which was more than offset by third-party purchases, which rose ~2x (27% of throughput). Plasma contribution is targeted to reach around 20% of supply by end-26 from 14% in 2Q26.
- FFB yield is expected to improve. While BWPT's FFB yield of 12.5tonnes/ha in 2025 is the lowest among peers (vs a peer average of ~18tonnnes/ha), the company expects it to improve from next year, as planting density was raised from about 120 to 135 trees/ha three years ago and those trees are now maturing. Management also guided for a roughly 10-year replanting programme of about 4,000ha/year (4.8% of total planted area) starting next year, with the estate's current average age at around 18 years.
Highlights
- Net gearing fell to 1.5x in 1H26 from a 3.5x peak in 2021, with a quasi-reorganisation completed in 2Q26. Earnings momentum remains intact, with the company guiding for about 20% net profit growth in 2026.
- Management expects FFB yield to improve as higher-density plantings from three years ago mature, with replanting starting next year. Its first kernel crushing plant, due 2Q27, is expected to contribute around 10% of revenue.
- While it trades at EV/ha of Rp101m (half the sector average), the company has multiple growth levers ahead, a cleaner balance sheet, and initiatives underway to address its ageing estate and low yield.
Analysis
- Eagle High Plantations (BWPT) is undergoing a turnaround restructuring process. Ever since the Rajawali Group took over in 2014, the landbank has expanded nearly 4.4x to 416,006 ha (only 147,263ha of that was planted). Heavy losses followed through 2019-21 (Rp1.4t net loss in 2021). The company has since divested scattered subsidiaries and estates, cutting the landbank to around 157,000 ha, while net gearing fell to 1.5x in 1H26 from a 3.5x peak in 2021 and interest coverage improved to about 3x. A quasi-reorganisation in 2Q26 cleared the accumulated deficit, raising the possibility for dividend payment. What remains is 84,000 ha planted across Kalimantan (~90% of revenue), Papua and Sumatra, with seven mills (400 MT/hour, five RSPO-certified, targeting 100% by 2027) and 94,000 MT of storage.
- Earnings momentum intact. The company guides for net profit growth of around 20% yoy in 2026, implying Rp470b, on about 1.3m tonnes of FFB processed (+6% yoy) and higher CPO prices. CPO has continued to trend up, with Nov 26 futures at RM4,940/tonne (~14% above the 1H26 average). In 1H26, revenue rose 17% yoy to Rp3.26t and net profit grew 23% yoy to Rp211b, on higher CPO ASP (+3.6% yoy) and sales volume (+14% yoy). Note that own FFB production fell 5% yoy to 510,233 tonnes, which was more than offset by third-party purchases, which rose ~2x (27% of throughput). Plasma contribution is targeted to reach around 20% of supply by end-26 from 14% in 2Q26.
- FFB yield is expected to improve. While BWPT's FFB yield of 12.5tonnes/ha in 2025 is the lowest among peers (vs a peer average of ~18tonnnes/ha), the company expects it to improve from next year, as planting density was raised from about 120 to 135 trees/ha three years ago and those trees are now maturing. Management also guided for a roughly 10-year replanting programme of about 4,000ha/year (4.8% of total planted area) starting next year, with the estate's current average age at around 18 years.
NOT RATED
Current price:
Target price:
Upside:
Rp127
n.a.
n.a.
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
