PETALING JAYA: Leong Hup International Bhd
’s forward growth is expected to be supported by rising per capita chicken and egg consumption, supported by government initiatives and resilient economic growth across its key operating markets.
In a report, TA Research said the group remains “cautiously optimistic on its financial year 2026 (FY26) outlook” despite macroeconomic uncertainties arising from ongoing geopolitical tensions.
To navigate rising cost pressures and foreign-exchange translation impacts in FY26, it plans to implement prudent cost optimisation measures and maintain disciplined cash flow management.
Leong Hup posted a core profit of RM115mil in the first quarter of FY26 (1Q26). The results met expectations, accounting for 22% of both TA Research’s and consensus full-year estimates.
TA Research maintains its “buy” call with an unchanged target price of RM1.05 a share, based on seven times 2027 earnings per share. The shares were last traded at 73 sen.
In 1Q26, earnings before interest and tax for its livestock and poultry-related segment had surged 69.1% year-on-year (y-o-y) to RM93mil.
This was supported by revenue growth of 3.5% y-o-y.
TA Research said the strong performance was mainly driven by higher average selling prices (ASP) and sales volumes of broiler day-old chicks or DOCs and eggs in Malaysia. This was also the case for its operations in Indonesia. Higher ASPs and sales volumes of fresh chicken in Singapore also contributed to the growth.
In contrast, earnings before interest and tax for the group’s feedmill segment declined 14.3% y-o-y to RM112mil in 1Q26 despite relatively stable turnover of RM889mil.
The weaker performance was mainly attributable to higher operating expenses, lower ASPs in Malaysia, and unfavourable foreign-exchange translation impacts, which weighed on the reported revenue of the Indonesia and Vietnam operations.
Excluding the foreign-exchange impact, both countries recorded stronger topline growth in local currency terms, it said.
