PETALING JAYA: TA Research has initiated coverage on poultry company CAB Cakaran
Corp Bhd with a “buy” recommendation and a target price of 89 sen per share, based on five times 2026 earnings per share (EPS).
At last look, the stock was at 62 sen.
The research house said, in a note to clients, among all livestock products sold in Malaysia, poultry meat represents the most widely consumed and cost-effective source of animal protein, with annual per capita chicken consumption increasing to 49.3kg in 2023, up from 45.7kg in 2019.
Consequently, the poultry sub-sector holds a pivotal position in the overall livestock production industry in Malaysia, accounting for 82.7% of total livestock production value, which amounted to RM24.6bil in 2023, it said.
Citing Protege Associates, TA Research said the poultry and poultry products industry revenue is projected to expand at a compounded annual growth rate of 4.4%, reaching RM26.3bil in 2029, up from RM18.9bil in 2022.
This growth is driven by several factors including rising prices of alternative livestock proteins such as beef and swine, positioning poultry as a more affordable protein option, ongoing urbanisation and a fast-paced consumer lifestyle, it said.
It derived a fair value estimate of 89 sen per share for CAB Cakaran, representing a 23% discount to the peer average price earnings ratio of 6.5 times.
“We believe the discount is justified,” it added.
