RHB Research expects earnings to continue benefiting from new industrial property ventures.
PETALING JAYA: Analysts remain upbeat on SD Guthrie Bhd
’s prospects, citing robust earnings momentum supported by firm crude palm oil (CPO) prices, recurring land sale gains, and a growing focus on renewable energy and environmental, social and governance (ESG) leadership.
RHB Research, which raised its target price (TP) to RM6.95 from RM6.10, described the plantation group as “poised for sustained earnings growth, buoyed by triple tailwinds from commodity prices, land monetisation, and sustainability leadership”.
The research house expects earnings to continue benefiting from new industrial property ventures, noting that “valuation is attractive – trading at 15.6 times 2026 forecast price over earnings ratio, at the low end of peers”.
Similarly, CIMB Research raised its sum-of-parts TP to RM6.01 and maintained a “buy” call after revising earnings forecasts upward by up to 5%.
“We see potential catalysts from higher-than-expected CPO prices, additional land sale gains, and dividend upside,” it said, which expects 2026 production costs for the group to remain stable, adding that “firm prices and steady yields are supportive of next year’s earnings”.
Hong Leong Investment Bank Research (HLIB Research) echoed the optimism, keeping its “buy” rating and target price of RM5.76 unchanged.
The research house said SD Guthrie remained one of its sector top picks due to its ongoing efforts to diversify earnings drivers, particularly through renewable energy and industrial property developments.
For the first nine months of financial year 2025 (9M25), SD Guthrie’s core net profit rose sharply, exceeding most expectations.
RHB Research said the group’s earnings for the 9M25 were strong “due to maiden contributions from the industrial property segment”, with core profit accounting for up to 104% of full-year estimates.
CIMB Research reported that core net profit climbed 38% year-on-year (y-o-y) to RM499mil in the third quarter of financial year 2025 (3Q25), bringing 9M25 profit to RM1.53bil – about 82% of its full-year forecast.
HLIB Research similarly estimated core profit at RM1.51bil, up 55% y-o-y, “driven primarily by higher realised palm product prices and lower blended CPO production costs.”
The highlight of the quarter was a RM378mil gain from the disposal of 1,195 acres in Bukit Pelandok to SD Guthrie’s joint venture with Eco World Development and NS Corp.
“We noted maiden contributions from the new industrial segment, with targeted earnings before interest and taxes of RM500mil to RM700mil from land sale gains per year,” RHB Research said.
The group maintained its full-year land sale guidance of RM500mil, targeting the higher end of RM700mil for 2026.
Operationally, SD Guthrie achieved a 2% increase in group fresh fruit bunches output for 9M25, led by 4% growth in Indonesia and 8% in Papua New Guinea, which offset a 1% decline in Malaysia.
HLIB Research reported that management now expects “output growth to come in at the lower end of the earlier 3% to 5% target range”.
Production costs were well-contained, averaging RM2,535 per tonne – “on track to meet the RM2,500 per tonne target for FY25”, according to CIMB Research.
Commodity prices were another bright spot, with RHB Research noting that SD Guthrie recorded an average CPO price of RM4,292 per tonne in 9M25, up 8% y-o-y, and has already sold its remaining 2025 output at RM4,365 per tonne.
It has also hedged about 10% of its 2026 output at RM4,470 per tonne.
The company’s next growth frontier lies in renewable energy.
CIMB Research highlighted SD Guthrie’s partnership with Gamuda Energy Sdn Bhd to develop up to 1.2 gigawatts of solar and energy storage capacity across Malaysia.
“The collaboration will leverage SD Guthrie’s extensive land bank and generate long-term recurring income,” observed the research house.
With earnings visibility underpinned by high CPO prices, recurring land sale gains and a strong ESG standing, analysts agree SD Guthrie is well-positioned for long-term growth.
“We maintain ‘buy’,” said RHB Research.
“Triple tailwinds and disciplined execution support our bullish outlook for the group.”
