Apex Securities Research said it expects stronger earnings in the coming quarter on higher crude palm oil production and firmer prices.
PETALING JAYA: Analysts have mixed views on Kim Loong Resources Bhd
’s business performance over the next few quarters, amid a challenging economic climate.
Apex Securities Research said, looking ahead, it expects stronger earnings in the coming quarter on higher crude palm oil (CPO) production and firmer prices, alongside improved milling margins during the peak harvest season.
Fresh fruit bunch (FFB) output also improved by 6% to 86,942 tonnes from 81,894 tonnes in the group’s second quarter ended July 31, 2025 (2Q26).
Meanwhile, the research house added that FFB intake for the milling operations is expected to be resilient at 1.6 million tonnes, supported by the group’s sustained high utilisation rate.
The research house expects another dividend of 10 sen per share to be declared in the second half of the company’s financial year ending Jan31, 2026 (2H26).
As such, total dividend its financial year 2026 (FY26) could end up at 15 sen per share, which translates into a dividend yield of 6.4% based on the current share price of RM2.33, Apex Securities Research noted.
For 1H26, the group’s cumulative net profit rose marginally by 1.3% year-on-year (y-o-y) to RM89.1mil.
Revenue grew 6.7% y-o-y to RM847.9mil, driven mainly by higher production and stronger prices.
The research house is maintaining its “hold” recommendation on Kim Loong with an unchanged target price of RM2.10.
It noted that the risks to the group include tighter European Union regulations, changing weather patterns, taxation and export duties in Indonesia possibly affecting global supply, shortage of labour and rising operational costs.
TA Research said it is maintaining a cautious view on CPO prices as global soybean prices are expected to remain under pressure from ample South American supply, though strong biofuel demand provides some support.
The research house said volatility could come due to weather and trade policy shifts, particularly in China-US tariffs, which could in turn affect CPO competitiveness and demand in the global vegetable oil market.
“We maintain a target price of RM2.31 per share, based on 15 times 2026 earnings per share.
“However, we downgrade the stock to ‘sell’ from ‘hold’ due to limited upside potential at current levels.
“While operational performance remains stable and dividend payouts are consistent, we believe valuations have already priced in near-term positives, leaving minimal room for further re-rating,” the research house added.
