PETALING JAYA: The plantation sector’s upcoming fourth quarter results for 2025 (4Q25) will likely show disparity in the earnings trends between Malaysia-and Indonesia-centric planters, according to analysts.
In a report, RHB Research said Malaysia-centric planters’ earnings should improve quarter-on-quarter (q-o-q) on strengthening output, offset by slightly lower average selling prices (ASPs).
However, Indonesia-centric planters could see flattish-to-slightly lower q-o-q earnings in 4Q25, as their lower ASPs could be offset by higher output, according to the research house.
For 2025, RHB Research said both Malaysia and Indonesia-centric planters should book positive year-on-year (y-o-y) earnings growth, since ASPs as well as output increased in 2025.
“Overall, we expect nine companies to record largely in-line earnings for 4Q25, based on our estimated fresh fruit bunch (FFB) production levels,” the research house added.
Its top picks within the sector include Johor Plantations Group Bhd
, Sarawak Oil Palms Bhd, IOI Corp Bhd, Perusahaan Perkebunan London Sumatra Indonesia Tbk, SD Guthrie Bhd and First Resources Ltd.
RHB Research, which is “neutral” on the plantation sector, said its crude palm oil (CPO) price assumptions stood at RM4,250 per tonne for 2026 and RM4,100 per tonne for 2027, respectively.
Meanwhile, Kenanga Research, in a note to clients, said most planters should report good full-year results for 2025 on good prices and better harvests.
However, 2026 earnings is likely to moderate due to softer to flattish CPO prices and production.
Nevertheless, profitability and cash flows are expected to stay healthy in 2026, although growth may be muted.
“Our preferences are planters with growth,” the research house pointed out.
They include Kuala Lumpur Kepong Bhd (KLK), underpinned by improving FFB yields and push into real estate and PPB Group Bhd for its fast-moving consumer goods profit recovery, low valuation as well as abating negative sentiment surrounding Wilmar International Ltd.
TSH Resources Bhd is also cited for its organic upstream growth over the coming three to five years.
On the latest Malaysian Palm Oil Board January 2026 statistics, TA Research said: “We believe the data are mildly bullish for CPO prices in the short term. However, the upside could be moderate as the inventories are still elevated and production remains firm, suggesting supply pressure could re-emerge once seasonal output normalises.”
Underpinning the low production, stockpiles fell to 2.82 million tonnes in January, marking the first drawdown after 10 consecutive months of increase.
CPO production in January also declined to 1.58 million tonnes, reflecting seasonal weakness following the year-end peak.
Overall, TA Research said the near-term CPO prices may find some support from seasonal supply tightness.
The research house maintained a “buy” rating on KLK with a target price of RM23.09, TSH at RM1.43 and United Malacca Bhd at RM6.72.
Key upside risks to its sector recommendation include South America’s soybean supply turning out to be lower than market expectations; a more promising demand recovery story, lower-than-expected palm oil production and significant reductions in production costs.
