PETALING JAYA: Leong Hup International Bhd
’s earnings prospects are expected to be supported by a resilient domestic market, rising poultry average selling prices (ASPs) in Indonesia and continued growth in poultry demand in Vietnam.
The fully integrated poultry producer’s third-quarter results of financial year 2025 (3Q25) have exceeded most analysts’ expectations.
In a report, Maybank Investment Bank Research (Maybank IB) said: “We expect a stable group earnings trajectory in 4Q25. Favourable movements in feed raw material ASPs will also aid in keeping operating margins steady.”
The brokerage firm has raised its earnings estimates on Leong Hup by 17% to 19% for financial year 2025 (FY25) to FY27.
“We believe Leong Hup’s outlook remains positive on the back of resilient 4Q25 poultry demand and ASPs in Malaysia, continuing uptrend in both broiler and day-old chicks ASPs in Indonesia, and stable demand growth in Vietnam,” it noted.
With manageable levels of feed raw material costs such as corn and soybean expected in the near term, Maybank IB Research expects the risks of group margin volatility to be minimised.
The brokerage has kept a “buy” call on the stock with an unchanged target price of 82 sen. Despite uncertainties from escalating tariffs and geopolitical tensions, Leong Hup’s management remains cautiously optimistic on its earnings prospects.
This is underpinned by resilient demand growth for chicken and eggs across the group’s markets and stable feed costs, said Hong Leong Investment Bank (HLIB) Research in a note to clients.
The research house has raised its FY25 and FY26 core net profit forecasts by 4.2% and 0.9%, mainly to account for lower finance cost assumptions.
Post earnings revision and roll forward of valuation base year, the research house maintained a “buy” on the stock with a higher target price of 84 sen.
“We continue to like Leong Hup for its attractive valuation and healthy balance sheet with net gearing of 0.29 times as at Sept 30, 2025,” it added.
MBSB Research, meanwhile, expects Leong Hup’s outlook to be supported by stable feed input costs for corn and soybean meal and the still underpenetrated growth potential in chicken and egg consumption across its key Asean markets.
Underpinned by firm domestic demand and improving trade flows, the brokerage said Leong Hup stands to benefit from rising protein consumption despite near term geopolitical and tariff uncertainties.
Backed by a softer US dollar, a diversified operating footprint and its essential food portfolio, Leong Hup also remains a defensive play, while ongoing prudent cost and resource management should sustain steady growth.
MBSB Research has maintained its forecasts on Leong Hup with a “buy” call at an unchanged target price of 90 sen.
Looking ahead to 4Q25, RHB Research in a report said the domestic market could see softer earnings as the full impact of egg subsidy termination will be reflected.
However, the strong Indonesian earnings contribution could sustain on elevated ASPs, it noted.
“Beyond the immediate term, we believe the overall fundamentals of the poultry industry have improved with the pandemic and commodity supercycle phasing out the smaller and weaker players,” said MBSB Research.
This has led to industry consolidation, which is favourable to large industry players such as Leong Hup.
Coupled with a sturdier balance sheet, MBSB Research believes that the group is well positioned to capture more market share and improve its efficiency level via capacity expansion.
