KUALA LUMPUR: Malacca Securities has pegged a target price of 66 sen on Hock Soon Capital Bhd, representing a 10% premium over the initial public offering (IPO) price of the company, which is slated to make its debut on the Main Market of Bursa Malaysia on Feb 13, 2026.
The integrated poultry farmer set its IPO at 60 sen apiece, aiming to raise RM60mil in gross proceeds with plans to allocate the bulk of it towards building a new poultry farm in Teluk Intan, Perak.
According to Malacca Securities, the group is set to increase its daily egg production capacity by 103.6%, which will add about 1.53 million eggs per day through the establishment of 25 new closed-house coops in Teluk Intan.
This expansion is supported by an upgrade to its feed mill operations in Bidor with a new 225 MT/day production line estimated to commence by 4Q27.
The research firm said the ringgit's strengthening against the US dollar to below RM4 is expected to boost the group's profitability.
"As raw materials for feed production (transacted in USD) accounted for about 70% of total purchases in FY25, a stronger local currency directly lowers the cost of key inputs like maize and soybean meal.
"We believe with this favourable ringgit strength, coupled with the group's
vertically integrated model, could potentially translate into stronger GP margins," it said.
Malacca Securities also noted several positive macro tailwinds for Hock Soon, icluding its anticipation that average selling prices (ASP) for Hock Soon eggs will rise in tandem with average egg prices, wihle demand for the eggs from the HORECA sector will rise due to Visit Malaysa Year 2026.
It added that the group is aiming to receive the Singapore Food Agency export licence by 1Q26, which will allow it to tap into Singapore's high reliance on imported table eggs.
"We favour this expansion as it can
act as a revenue hedge against the removal of Malaysian government subsidies, mitigate domestic market volatility while capturing higher-value export demand," it said.
In a separate report, TA Securities placed Hock Soon's fair value at a 27% discount to the IPO price.
The research firm said that at the IPO price of 60 sen, the group’s historical three-year average price earnings ratio (PER) exceeds 60x after normalising earnings by excluding accounting gains and government subsidies.
"We assign a fair value of 44 sen a share to Hock Soon, based on our target 2026 PER of seven times for the poultry industry."
Meanwhile, RHB Research factored a higher ASP and lower production costs into its estimates. It said this would partially mitigate the impact of the removal of the egg subsidy, which took effect in Aug 2025.
"FY26F will reflect the normalised earnings base post subsidy removal whilst we expect moderate FY27 earnings growth, due to its investment to develop new markets and promote house brands. Thereafter, we expect more exciting
growth to kick in by FY28."
It set a fair value of 61 sen a share on the stock, implying eight times FY27 PER, in line with a sector peer, Teo Seng Capital Bhd
.
