PETALING JAYA: United Malacca Bhd
is likely to see a stronger fourth quarter to lift its financial year 2026 (FY26) core net profit by 43% year-on-year, given the current strength in crude palm oil (CPO) prices and rising yields.
Its nine-month FY26 core net profit was already up by 50% year-on-year, said Kenanga Research.
It expected FY27 to be slightly weaker on global edible oil prices, as its Indonesian upstream has yet to hit prime yields while cost was expected to rise even though it remained contained.
The research house upgraded FY26 core earnings per share (EPS) by 4% to 79.3 sen and FY27 core EPS by 8% to 76 sen.
Kenanga Research added that the group reported good nine- month FY26 earnings that exceeded expectations, accounting for 80% of the research house’s and 97% of consensus full year’s estimates, respectively.
Meanwhile, TA Research raised its FY26-FY28 earnings estimates by 16.5% to 21.4%, driven by higher fresh fruit bunch (FFB) growth assumptions in line with management guidance, alongside firmer CPO price assumptions.
CIMB Research also raised its FY26–FY28 earnings forecasts by 48% to 70%, reflecting higher CPO prices, FFB output and operating costs.
It maintained its “buy” call with a sum-of-parts-based target price (TP) of RM6.83 a share.
The research house expected CPO prices to strengthen in 2026, supported by higher biodiesel mandates in Indonesia and the United States, which will boost edible oil demand.
In addition, potential El Nino conditions in the second half of 2026 could tighten supply.
The research house also raised its dividend forecasts for 2026–2028 to 22 sen from 12 sen, reflecting higher earnings projections and a higher dividend payout ratio of 27.8%to 31%.
This implied a dividend yield of 3.7%.
TA Research maintained its “buy” call with a higher TP of RM7.34 a share from RM7.29 per share, after rolling forward its valuation base year to 2027 with price-to-earnings multiple of 13 times.
“As a pure upstream planter, the group is well placed to benefit from any upside in CPO prices,” said the research house.
Kenanga Research said its TP is based on 0.9 times price to book value, which is the 10-year average for mid-sized planters.
It retained its “outperform” stance and maintained its TP at RM6.70 a share.
The research house said management has guided for stronger FFB production growth of 8% to 10% for FY26 (versus 3% to 5% previously), supported by an optimal oil palm age profile and improved operational efficiency.
