Latest news with #RM4.80
The Star
11-06-2025
- Business
- The Star
QL Resources to remain resilient amid trade tensions
Following the removal of the egg subsidy, UOBKH Research said profitability is expected to fall to three sen to five sen per egg. PETALING JAYA: Although QL Resources Bhd remains resilient amid trade tensions and the minimum wage hike policy, its core segments are facing a mixed outlook, according to UOB Kay Hian (UOBKH) Research. Based on the company's estimates, only 0.5% of total group sales are US export sales, which primarily consisted of surimi-based products, said the research house. 'Evidently, the tariff war would have a minimal direct impact on QL Resources. 'However, management does not rule out that supply disruptions and curtailed spending may indirectly impact its operations,' said UOBKH Research. Meanwhile, 27% of the company's workforce of 12,000 employees will benefit from the minimum wage revision, which is expected to cost the group an additional RM10mil or a digestible 1.4% of its financial year 2026 (FY26) profit before tax earnings. Management expected to largely absorb it or see a partial cost pass through, the research house noted. QL Resources is involved in integrated livestock farming (ILF), marine products manufacturing and palm oil activities in Malaysia, Indonesia and Vietnam. For the ILF segment, the government has rationalised its subsidies on eggs, reduced it to from 10 sen per egg to five sen effective since May 1 and subsequently removing it on Aug 1. The company earned an estimated 10 sen per egg under the full subsidy scheme. Following the removal of the egg subsidy, UOBKH Research said profitability is expected to fall to three sen to five sen per egg. To protect its margins, the company is looking to lift its product mix toward its margin accretive branded eggs, which accounts for 20% of its total egg sales. The fishing and fishmeal sub-segments are likely to see extended headwinds, the research house noted. Fishmeal selling price has stabilised, but demand remains weak due to a slowdown in world aquaculture activity. This is further compounded by a higher Peru fishing quota which may exert pressure on prices going forward. In contrast, surimi and surimi-based products could see an improved performance in FY26. In the palm oil segment, growth would be driven by its solar company Plus Xnergy Holdings Sdn Bhd's contributions that are tied to its renewable energy and environmental, social and governance solution business. 'Its palm oil contributions are likely to moderate alongside lower crude palm oil prices that have trended downward to RM3,800 from more than RM4,200 in the fourth quarter of 2025 (4Q25) amid similar fresh fruit bunch production and oil extraction rate output,' UOBKH Research said. The research house is maintaining its 'hold' stance on QL Resources' with an unchanged target price of RM4.80, adding that key risks include unfavourable weather conditions affecting fishing yields, outbreak of poultry diseases and a sharp collapse in crude palm oil prices.
The Star
08-06-2025
- Business
- The Star
Alliance Bank steady on robust loans, healthy NIM
PETALING JAYA: CIMB Research is maintaining its 'buy' call on Alliance Bank Malaysia Bhd with an unchanged target price of RM4.80. It stated that the lender's key catalysts include robust loan growth and a healthy net interest margin or NIM. In a report to clients, the research house said its target price of RM4.80 (ex-rights basis) was based on a return on equity (ROE) of 9.7% and a fair price-to-book value of one times to the lender's financial year ending March 31, 2026 (FY26). The bank's other key catalysts include benign credit costs and a potential merger, CIMB Research said. The research house said the bank's downside risks include higher-than-expected credit costs and higher cost of funds. In the report, it also noted that Alliance Bank had announced its rights issue price fixed at RM3.33. The entitlement basis is two rights shares for every 17 existing shares. 'These are in line with our expectations. 'The total funding raised from the rights issue of RM606.5mil is consistent with the earlier indicative amount of RM600mil. 'Overall, there were no major surprises in the latest rights issue announcement,' the research house said. CIMB Research said the bank announced in March a renounceable rights issue to raise gross proceeds of RM600mil with a rights issue price of RM4.20 per rights share (reflecting a discount of approximately 20% to the then-market price of RM5.09), with an entitlement basis of three rights shares for every 32 shares. The research house reiterated that the change was in line with its expectations and that the latest announcement did not come as a surprise, and was in line with its earlier estimate that the rights price may have to be adjusted down, owing to the drop in Alliance Bank's share price. CIMB Research estimated that the rights price might have to be revised down to RM3.20 (from the earlier indicative RM4.20) if set at a 20% discount to the current share price, with the number of rights increased to 186 million from the earlier indicative 145.1 million. This is based on an estimated revised entitlement of four rights shares for every 32 shares. The research house pointed out that Alliance Bank's key targets for FY26 included an ROE of more than 10% post rights issue, loan growth of between 8% and 10%, net interest margin of between 2.40% and 2.45%, net credit cost of between 30 and 35 basis points, cost-to- income ratio of 48%, and a dividend payout ratio of 40% to 50%.
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.
New Straits Times
28-04-2025
- Business
- New Straits Times
Sarawak Oil Palms' output recovery to sustain earnings
KUALA LUMPUR: Sarawak Oil Palms Bhd is expected to deliver a consistent earnings track record as output continues to improve, said RHB Research. However, the research house noted that the earnings may be offset by moderating crude palm oil (CPO) prices. Sarawak Oil recorded CPO average selling price (ASP) of RM4,688 in the first quarter (Q1) 2025, while palm kernel prices shot up by a larger 14 per cent quarter on quarter (QoQ) to RM4,105. This is higher than the average Malaysian Palm Oil Board (MPOB) price, which represents a 13 per cent premium. "Consequently, Sarawak Oil's profit before tax margin rose to 11 per cent during the quarter versus 8.5 per cent in Q1 2024. "We note that the company does not engage in forward sales and we keep our financial year (FY25) CPO price assumption of RM4,300 per tonne," the firm said. Sarawak Oil's Q1 2025 core profit fell 26 per cent QoQ to RM120.8 million, largely in line with RHB Research's and street estimates, at 24 per cent and 27 per cent of full-year forecasts. It said the decline was mainly due to the drop in fresh fruit bunches output as well as lower CPO ASPs. "We note that Sarawak Oil is now in the midst of securing first half 2025 fertiliser requirements at prices that are flattish year on year (YoY). "We keep our unit cost assumptions unchanged, for now, as we expect output recovery in the coming quarters, which should bring down unit costs accordingly," it said. Overall, RHB Research noted that there will be no disclosure for Sarawak Oil's downstream, but the firm is of the view the segment will face challenges, no thanks to the current volatility in the market. While Malaysia's palm oil may appear attractive compared to Indonesia's due to lower US tariffs, the firm said this advantage may not be straightforward. It noted that Indonesia's more advantageous tax structure at 17.9 per cent compared with Malaysia's 10 per cent, assuming the recent proposal to revise export tax, could offset the benefit. "As such, we remain cautious on the segment's performance and keep our conservative estimates for the utilisation rate of 75 per cent and margin assumptions of three per cent. "We make no changes to our earnings, as CPO prices continue to moderate. We maintain 'buy' and RM4.80 target price on the stock," it added.
