PETALING JAYA: Hap Seng Plantations Holdings Bhd
(HAPL) is poised for a stronger second half of financial year 2026 (2H26) with analysts projecting earnings driven by strong crude palm oil (CPO) prices and a seasonal recovery in fresh fruit bunch (FFB) production, which is guided to peak in the fourth quarter (4Q26) of the year.
RHB Research stated on a year-to-date basis, FFB output for the seven months of the year improved 6.8% year-on-year (y-o-y), tracking below both management’s target of 16% to 17% and its own conservative 10% full-year guidance.
“In line with seasonal patterns, management guided that production would peak in 4Q26. We therefore maintain our FFB production growth assumptions of 10%, 5.2% and 5.1% for financial year 2026 (FY26) to FY28,” it stated in a report on the planter.
BIMB Research expects CPO price resilience in 2H26 to be supported by higher biodiesel mandates and weather-related supply risks.
Additionally, HAPL stands to benefit directly from its spot-priced sales and premium pricing for Roundtable on Sustainable Palm Oil-certified output, while 2H26 unit costs are anticipated to improve as rising crop volume enhances fixed cost absorption.
For 1H26, the company posted a core earnings rose 12% y-o-y to RM77.8mil driven by a 23% surge in 1H26 CPO sales volume, which helped offset slightly lower realised palm-product prices.
For 2Q26, core profit reached RM38.3mil, up 27.1% y-o-y but declined 3.2% quarter-on-quarter as higher realised prices were offset by lower sales volumes.
CPO average selling price (ASP) in the quarter strengthened to RM4,630 per tonne and palm kernel ASP rose to RM3,723 per tonne. HAPL declared a first interim dividend of 2 sen per share.
BIMB Research reiterated its ‘buy’ call on HAPL with a higher target price (TP) of RM3 a share (from RM2.70), valuing the planter at 14 times FY27 earnings per share (EPS).
Hong Leong Investment Bank Research also maintained its “buy” rating on the planter with a TP of RM2.88 a share , based on 14.5 times revised FY27 core EPS.
RHB Research kept its ‘buy’ call on HAPL but raised its TP to RM2.95 a share (from RM2.60) by pegging it to an unchanged 12 times FY27 price earning multiple and including a 4% environmental, social and governance premium.
Brokers favour the planter due to HAPL’s stellar balance sheet that features net cash of 92 to 97.7 sen per share as of 1H26, attractive dividend yields of 4%, and strong operating leverage to elevated CPO prices.
