Philip Research projects meaningful contribution to the planter’s earnings after 2027, potentially adding RM400mil to RM700mil in annual revenue.
PETALING JAYA: Johor Plantations Group Bhd
, which is transitioning into an integrated palm oil firm, may see longer-term upside to earnings as contributions from downstream operations becomes more significant, according to Philip Research.
The company, building on its upstream presence, has a joint venture with Fuji Oil Co Ltd for the expansion into the downstream business, which involves the setting up of an integrated sustainable palm oil complex to be commissioned by the second half of 2026.
The research house projected meaningful contribution to the planter’s earnings after 2027, potentially adding RM400mil to RM700mil in annual revenue at single-digit profit margins.
“We project Johor Plantations to deliver year-on-year (y-o-y) revenue growth of 4.7%, 1.2%, and 30.9% over 2025 to 2027 to RM1.60bil, RM1.61bil and RM2.11bil, respectively, underpinned by supportive crude palm oil (CPO) prices, improving CPO yield, and the commencement of downstream contributions in 2027,” it said.
It pointed out that the introduction of downstream revenue marks a shift in the company’s earnings mix, broadening income streams beyond pure upstream exposure as this will lift revenue and enhance earnings visibility despite modest downstream margins of 5% to 7%.
“We forecast core earnings to grow a strong 22% y-o-y in 2025, followed by a 7% to 12% y-o-y decline over 2026 to 2027, reflecting a softer CPO average selling price (ASP) environment and margin dilution from the downstream segment,” it said.
“Nonetheless, we view the near-term earnings normalisation as cyclical rather than structural, with longer-term upside anchored by improved earnings visibility and the benefits of integration post-2027,” it added.
The research house, noting that the company delivered strong third quarter ended Sept 30, 2025 (3Q25) results with a 16.5% rise in revenue and pre-tax profit surging 46.8% on CPO and palm kernel sales and firmer ASPs, initiated coverage on the stock with a “hold” call and a target price of RM1.53.
The company’s management expects 4Q25 fresh fruit bunch (FFB) output to decline 5% quarter-on-quarter due to seasonality, bringing full-year production to 1.1 million tonnes. For 2026, FFB volumes could come in flat, as replanting offset yield gains.
