PETALING JAYA: QL Resources Bhd
is expected to sustain steady long-term growth, underpinned by the defensive nature of its staple food businesses and expanding value-added protein capacity, according to MBSB Research.
The research house maintained a measured view of QL Resources’ near-term prospects, supported by the diversified and defensive profile of its staple food portfolio.
It reiterated a “neutral” rating on the group with an unchanged target price of RM4.28, based on its 10-year multi-stage discounted cash flow model and a weighted average cost of capital of 7.2%.
“Within the group’s integrated livestock farming division, earnings should stabilise as feed cost trends remain manageable and egg prices gradually recover across Malaysia, Indonesia and Vietnam, partially cushioning the impact from subsidy removals,” MBSB Research said.
The marine products manufacturing segment is expected to support earnings growth.
MBSB Research noted that the division “is expected to benefit from firmer surimi and aquaculture contributions, while fishmeal margins may improve progressively alongside regional supply dynamics, albeit with ongoing input cost volatility.”
Meanwhile, the convenience store business should gradually recover as tourism-related footfall improves and store expansion continues. However, the research house cautioned that “competitive intensity and cost pressures remain key headwinds.”
For the palm oil and clean energy segment, performance could strengthen as operational conditions improve.
“Palm oil earnings may improve on better fresh fruit bunch yields, while clean energy contributions are likely to normalise following the slowdown in new solar projects post Net Energy Metering 3.0, supported by existing bioenergy and water treatment backlogs,” it said.
Separately, QL Resources has moved to resolve a long-standing shareholder dispute linked to its Indonesian plantation venture, PT Pipit Mutiara Indah.
Through its wholly owned unit QL Oil Sdn Bhd, the group entered a settlement agreement with Hang Ting Pte Ltd and PT Pipit Citra Perkasa, terminating joint-venture agreements and ending arbitration and litigation proceedings that began in 2021.
