PETALING JAYA: Ta Ann Holdings Bhd
is poised for stronger earnings in the second half of financial year 2025 (2H25).
This is expected to come on the back of higher crude palm oil (CPO) average selling prices, increased production and improving sales volume for its timber products segment.
The group, in its 1H25 results, posted a core net profit of RM85mil, a 34% rise year-on-year, driven by higher palm kernel selling prices.
A second interim dividend of 10 sen, which was a positive surprise, also lifted the 1H25 dividend per share (DPS) to 20 sen.
According to CIMB Research, the results were broadly in line with expectations, at 46% of both its and consensus full-year forecasts.
“We have raised our financial year 2025 (FY25)-FY26 DPS forecasts to 35 sen,” said the research house, which expects stronger 2H25 earnings on the back of higher fresh fruit bunches output and timber losses.
Accordingly, CIMB Research has upgraded Ta Ann to a “buy” from a “hold” previously, with an unchanged target price of RM4.27 per share.
“We like the stock for its attractive 8.8% dividend yield, underpinned by a strong net cash position of RM322mil (73 sen per share),” said the research house in a note.
CIMB Research pointed out that the group’s announcement on its new management line-up, as part of its succession planning, is positive for the medium to long term.
Ta Ann’s strong net cash position also supports higher dividend payouts ahead, it added.
Taking a cue from Ta Ann’s latest results, MBSB Research has upgraded the stock to a “buy” call with a revised target price of RM4.38, given the current valuations are still attractive at a high single-digit, versus to peers.
This presents buying opportunity, the brokerage firm noted.
“The earnings outlooks remain stable, underpinned by expanding FFB production estimated at around 769,000 ha, while cost of production is on the lower side about RM2,100 per tonne,” MBSB Research said.
CGS International Research, meanwhile, has reiterated an “add” recommendation on the stock with an unchanged target price of RM6.10.
“We like Ta Ann for its strong balance sheet, with a strong net cash position of 93 sen per share as at the end of March 2025, and high FY25-FY26 dividend yield of around 6%,” it pointed out.
The re-rating catalysts include stronger-than-expected CPO price spikes and higher-than-expected dividend payout.
