Broker: OCBC Investment Research
Date of Report: 14 November 2025
Excerpt from OCBC Investment Research report.
Report Summary
- Bumitama Agri Ltd (BAL) is a leading Indonesian palm oil producer, showing strong productivity and solid margins despite a slight revenue decline in 3Q25 due to weather-related delivery delays.
- The company’s dividend policy was revised to a 40-60% payout, positioning it as a dividend yield play, with a forward 12-month dividend yield of 5% and a fair value estimate of SGD1.45.
- Despite short-term price fluctuations, long-term fundamentals remain supportive for CPO prices, underpinned by resilient domestic demand and potential new biodiesel mandates in Indonesia.
- BAL continues to make ESG progress, reducing GHG emissions intensity and supporting community development, while maintaining regulatory compliance.
- Risks include regulatory changes, cost overruns, and unfavorable CPO price movements; upside catalysts could come from favorable weather, supportive policies, and accretive acquisitions.
- The report reiterates a HOLD rating, with valuation justified by improved investor engagement and inclusion in the MSCI Singapore Small Cap Index.
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