TA Research introduced its FY28 earnings projection of RM155mil.
PETALING JAYA: Kim Loong Resources Bhd
’s earnings forecast has been revised upwards by 6.2% and 6.6%, respectively, for financial years 2026 (FY26) to FY27.
This is after the company reported better- than-expected third-quarter FY26 (3Q26) earnings, said TA Research.
TA Research also introduced its FY28 earnings projection of RM155mil.
It upgraded Kim Loong to a “hold” from “sell” with a revised target price of RM2.47 a share from RM2.31 a share. This is based on a 2026 price-to-earnings ratio of 15 times and following the earnings revision.
The research house said management revised its FY26 fresh fruit brunch (FFB) production growth estimate to 6% to 8% from earlier guidance of 5% to 10%.
This factors in the improved age profile of young productive palms and the ongoing replanting programme. The group plans to replant about 300 to 500 ha in FY26 and expects to achieve a total processing throughput of 1.6 million tonnes of FFB.
Looking into 2026, TA Research maintains a cautious outlook on crude palm oil prices (CPO) as ample South American soybean supplies and the resumption of US-China trade may increase soybean oil flows, putting a constraint on CPO demand.
Nevertheless, biodiesel mandate-driven demand and potential weather related supply disruptions could serve as key catalysts for CPO price upside, helping to mitigate downside risks from trade and policy uncertainties.
The group’s 3Q26 results performance came in above its expectations, mainly supported by higher-than-expected palm oil prices. Despite a 5.1% increase in revenue, the group recorded a 13.7% year-on-year (y-o-y) drop in core net profit to RM42mil due to lower contributions from the milling business.
For the first nine months of FY26 (9M26), cumulative net profit fell 4.1% y-o-y to RM131mil, accounting for 84% of its full-year forecast and 80% of consensus estimates.
For 9M26, the plantation division posted a profit of RM126mil, marking a 20% y-o-y increase.
The milling division recorded a profit of RM83mil in 9M26, down 19.8% y-o-y. The weaker performance was mainly due to lower processing margins and higher repair and maintenance expenses.
The average CPO selling price rose 5% to RM4,300 a tonne, partially offset by a 1.8% y-o-y decline in sales volume, it said.
In a filing with Bursa Malaysia on Monday, the company said it expects to achieve a total processing throughput of 1.6 million tonnes of FFB for the current financial year.
“In terms of CPO price prospects, the management expects the average CPO price for the FY26 to stay above RM4,200 per tonne. We expect to perform satisfactorily for the financial year 2026,” it said.
