PETALING JAYA: Rhone Ma Holdings Bhd
’s move to expand its dairy business through joint venture (JV) vehicle, Jemaluang Dairy Valley (JDV), is only likely to contribute to its earnings in financial year 2026 or 2027 (FY26/27), according to Public Investment Bank (PublicInvest) Research.
The research house said the JV, which is setting up a 275ha dairy cattle farm project in Mersing, Johor, is likely to be loss-making during the gestation period.
The construction of this project is expected to complete by July 2024.
The JDV project is expected to boost national milk production by 10% with its planned 5.1 million litres of fresh milk produced annually.
Rhone Ma will be managing JDVs’ daily operations through its 49%-owned subsidiary, A2 Fresh Holdings Sdn Bhd (A2FSB) which will hold a 35% stake in the project with the remaining 35% held by Kulim Malaysia, a subsidiary of Johor Corp, which will also hold the remaining 30% of the venture in trust for the Johor state government.
“We view this JV positively as it enables Rhone Ma to expand its dairy farming business in the southern region of Peninsular Malaysia, while leveraging on the financial resources of Kulim. However, we are not expecting this JV to contribute meaningfully to the group until FY26/27,” PublicInvest Research stated.
It however maintain its ‘outperform” call on Rhone Ma, with an unchanged target price of 88 sen a share.
A2FSB will also participate in the community development programme as part of the entire project value chain, as well as planning and supervising the training and other pertinent activities for the satellite farmers programme.
Rhone Ma does not process milk that is produced at its Batang Kali farm but sells it to wholesalers due to absence of a milk processing plant.
Its shares closed at 71.5 sen each last week, giving it a market capitalisation of RM158mil.
