PETALING JAYA: QL Resources Bhd
is expected to experience more growth from its marine products and integrated livestock segments in the near term.
This is pursuant to plans to increase capacity in the marine products segment while its palm oil, clean energy and convenience stores divisions could see some challenges.
According to Maybank Investment Bank Research (Maybank IB), its marine products’ production capacity is expected to double over the next 10 years, with the first phase targeted for completion in the financial year 2028.
“QL’s marine products earnings contribution should be stable in the near term on expectations for better fish landing in the fourth quarter, and margin support from price increases to certain surimi-based products from January 2026.
“That said, meaningful earnings growth in marine products is capped by production constraints, and should only materialise when PT Hasil Laut accelerates production (at a circa 30% utilisation rate currently) and its QL Innofood Park in Hutan Melintang, Perak, is completed,” the research house added.
QL Innofood Park will be developed in phases over the course of 10 years and is expected to lift QL’s downstream annual production capacity to 180,000 tonnes per annum or 2.5 times its current capacity, it said.
Meanwhile, there are concerns over freight cost spikes amid the Middle East conflict that could impact its integrated livestock segment, particularly for imports of feed materials of corn and soybean.
Maybank IB noted the group has a cost pass-through mechanism in place for its feed trading business, but will monitor the need to raise egg average selling prices according to domestic supply-demand dynamics.
In addition, QL’s court settlement with its Indonesia plantation partners brings the company’s long-standing legal dispute to a close and clears a path for it to fully divest its palm oil business.
However, the challenging outlook for the company’s convenience stores segment is expected to persist.
“Heightened competition within food and beverages retail has driven sales momentum down, while segmental margins may also remain suppressed given higher store operating costs,” Maybank IB said.
“With this, QL is re-prioritising new store openings to higher traffic areas within Greater Kuala Lumpur, Penang and the Southern region,” the research house said. It maintained its “hold” call on QL with an unchanged target price of RM4.25 per share.
