PETALING JAYA: Leong Hup International Bhd
’s RM157.5mil fine for price fixing is expected to remain paused in the near term after the company obtained leave from the Kuala Lumpur High Court to commence a judicial review of the Competition Appeal Tribunal’s (CAT) decision to dismiss its appeals in February.
In a note, MBSB Research made no changes to its core earnings forecasts for the company at this stage, noting that any penalty recognition would be treated as an exceptional or non-core item.
The research house said any developments in exceptional charge or cash outflow as a result of fine enforcement would be a matter of payment timing rather than amount.
“CAT’s dismissal doesn’t change the fine quantum, and next steps (possible further challenge or stay) mainly affect timing,” it said.
MBSB Research maintained its “buy” call on the stock, with an unchanged target price of RM1.10, as it opines the overhang concerning this will have already been priced into the market.
On Feb 11, 2026, CAT dismissed appeals by Leong Hup International’s subsidiary, Leong Hup Feedmill Malaysia Sdn Bhd (LHF), against the Malaysia Competition Commission’s (MyCC) December 2023 decision to fine LHF for coordinating with other poultry feed companies to fix prices.
Following this, the High Court granted LFM leave for judicial review against the CAT decision on March 5, 2026, along with an interim stay order in relation to CAT’s and MyCC’s decisions until LFM’s interim stay application is determined.
The next procedural steps involve the Court setting a case management date for filing directions and fixing a hearing date for LFM’s interim stay application.
According to MBSB Research, these will serve as the next key catalyst for fine enforcement timing.
“The focus now shifts to whether the Court grants an interim stay after hearing both parties and the subsequent judicial review timetable,” it added.
“The stay outcome and court timetable remain the swing factors for when, or whether, the fine is recognised/paid.”
It said a bear case scenario would be that the interim stay is not granted or is lifted quickly, leading to enforcement and recovery actions moving forward, which would raise risks of earlier payment and an earlier exceptional profit and loss impact.
The research house estimates potential impact on Leong Hup International’s profit after tax and non-controlling interests, should the RM157.5mil penalty be recognised, to be a decline of 28.5% for its financial year 2026 (FY26) and 26.7% for FY27.
It said a bull case would be that the Court grants an interim stay, which would effectively maintain the enforcement pause through a longer legal process, deferring cash outflow or exceptional charges and preserving optionality while the judicial review runs its course.
MBSB Research has maintained a “positive” stance on the consumer sector.
