PETALING JAYA: MBSB Research remains cautiously optimistic on QL Resources Bhd
’s near-term prospects, underpinned by the diversified and defensive nature of its staple food portfolio.
“Within integrated livestock farming, earnings should stay resilient as broadly stable feed costs and a gradual recovery in egg prices across Malaysia, Indonesia and Vietnam help offset the removal of price controls, with branded egg sales continuing to provide margin support,” it said.
The research house has downgraded the stock to “neutral” from “buy”, following a recent rebound in the share price, even as the group embarks on one of its largest long-term expansion projects.
It was positive on the QL Innofood Park development, which enhances long-term earnings optionality by expanding production capacity and broadening QL’s protein offerings.
However, it cautioned that the positives have already been priced in at the current juncture, which underpins its neutral stance.
QL announced the development of QL Innofood Park, which is a major expansion of their manufacturing capabilities through a RM1.3bil investment over a 10-year horizon.
The research house kept its target price unchanged at RM4.33, based on a 10-year multi-stage discounted cashflow model and weighted average cost of capital of 7.2%, but said the positives are largely reflected in current valuations.
The project represents a strategic shift from QL’s traditional surimi-based operations into a broader protein platform.
According to the report, the park will enable QL to diversify into soy-chicken and flour-based protein products to meet rising demand for convenient, protein-rich and sustainable foods.
Covering about 40.47 ha in Hilir Perak and developed in phases over a decade, the site is expected to house 13 production facilities, supported by integrated utilities, logistics and warehousing, while incorporating Industry 4.0 technologies and sustainability features from the outset.
The initial phase, focused on core infrastructure such as cold storage and utilities, involves RM300mil and is targeted for completion by the second half of financial year 2027.
In parallel, QL plans to spend around RM100mil a year to add individual plants progressively as demand materialises.
Once fully operational, Innofood Park is expected to lift QL Foods’ annual production capacity to 180,000 tonnes, up from 50,000 tonnes currently at Hutan Melintang – a 2.5-times expansion.
This growth would materially strengthen QL’s ability to serve both domestic and export markets across a wider protein portfolio.
