Latest news with #QLResources'
The Star
09-06-2025
- Business
- The Star
QL Resources growth trajectory remains intact
PETALING JAYA: CGS International Research (CGSI Research) expects QL Resources Bhd 's potential expansion into adjacent verticals could possibly bolster further growth for the agro-based group moving forward. Following a recent analysts' call with the QL Resources' management, the research house said 'apart from expanding its product range in the proteins business, which we assume encompasses its ongoing ventures in broiler chickens and aquaculture, the group's management alluded to the need to have better control over the supply chain of its products, potentially expanding its retail reach outside of convenience stores. 'While no further details were provided, given QL Resources' success with the Family Mart franchise, this seems a credible opportunity to plug the earnings gap from the sale of its plantations business,' CGSI Research said in a report yesterday. 'With a net gearing of less than 10%, this provides the group with financial flexibility, in our view,' the research house added. QL Resources' management also provided a neutral outlook on its earnings for its financial year ending March 31, 2026 (FY26) . It expects the combination of egg subsidy rationalisation (five sen each in May and August this year) coupled with the lifting of the price ceiling by Aug 1 to lead to a normalisation in profits on subsidised eggs to between three sen and four sen per egg. 'An expansion of its branded egg segment, currently around 20% of eggs, is hoped to lift profitability over time,' added CGSI Research. Management was also upbeat on the clean-energy business under 53%-owned BM Greentech Bhd , whose pre-tax profit jumped 35% year-on-year (y-o-y) to RM73.5mil in FY25 helped by the acquisition of solar company Plus Xnergy in July 2024. The research house upgraded the stock from a 'reduce' call to 'hold' following its 10.9% share price decline over the past six months, but at a lower target price of RM4.37 per share. 'We believe QL Resources' 30.5 times calendar year 2026 price-earnings ratio better reflects its 14.3% recurring return on equity, but the upside is likely to be capped by slowing earnings growth in FY26,' it noted.
The Star
03-05-2025
- Business
- The Star
Termination of egg subsidy uplifts poultry stocks
CGSI Research raised concerns that the removal of the egg subsidies could impact QL Resources' expansion plans. PETALING JAYA: The stock market reacted positively to the removal of the subsidy and price control for chicken eggs, with most poultry stocks rising following the announcement by the Agriculture and Food Security Ministry. However, the largest listed poultry company by market capitalisation – QL Resources Bhd – declined marginally by 0.21% to RM4.80, valuing the group at RM17.5bil. Last December, CGS International (CGSI) Research raised concerns that the removal of the egg subsidies could impact QL Resources' expansion plans. It estimated that the group's pre-tax margins could ease by 0.4% year-on-year to 9.1% in the financial year 2026 (FY26), as the egg subsidies are reduced. Nonetheless, the decision to end egg subsidies lifted other poultry players. Teo Seng Capital Bhd , which produces more than four million chicken eggs daily, saw its share price hitting the highest level in over a month. The stock rose by 5.15% to RM1.02, while shares of PWF Corp Bhd and Lay Hong Bhd climbed by 4.61% and 4.69%, respectively. Other poultry stocks that moved north were Leong Hup International Bhd (1.63%), CCK Consolidated Holdings Bhd (1.55%) and Malayan Flour Mills Bhd (2.02%). CAB Cakaran Corp Bhd's share price remained unchanged at 53.5 sen after paring down earlier losses during the day. In a statement, the government announced the decision to scrap the price control on chicken eggs and reduce the egg subsidy rate from 10 sen to five sen per egg, effective today. Subsequently, the egg subsidy will be completely abolished on Aug 1, 2025. From February 2022 to December 2024, the government spent nearly RM2.5bil on egg subsidies to the industry to cover rising production costs due to the Covid-19 pandemic and the impact of the Ukraine-Russia war on the import prices of soybeans and corn. In deciding to remove the price control and subsidy, the Agriculture and Food Security Ministry said it has also taken into account that the prolonged period of price controls and subsidies is unsustainable for the continuity of the local egg production industry and the country's finances. 'The decision was taken after taking into consideration the industry's commitment to ensure enough supplies and costs which had stabilised,' according to the ministry.
