PETALING JAYA: Malayan Flour Mills Bhd
’s (MFM) earnings potential remains supported by sustained demand growth for wheat flour, which should help partially buffer impact from higher wheat prices arising from Russia-Ukraine tensions.
Additionally, capacity expansion of Vimaflour operations and silo storage, as well as potential opportunities for downstream ventures, underpin the group’s longer-term growth outlook.
Hong Leong Investment Bank (HLIB) Research said MFM’s flour milling business margin could be weighed down by the elevated wheat prices as a result of escalating conflict between Russia and Ukraine, which has disrupted grain export flows.
“Nevertheless, the impact could be at least partly mitigated by sustained demand growth for wheat flour, supported by its affordability relative to rice and the region’s structural growth potential,” the research house said.
MFM’s higher earnings in its first half (1H26) were driven by stronger contributions from the flour milling and poultry integration businesses, according to HLIB Research.
The company saw 1H26 core earnings rise by 28.1% year-on-year to RM84.7mil, with flour sales volume improving across all key markets.
Sales volumes in the poultry integration business also rose by 6% in 1H26, as demand weakness from the food services channel was more than mitigated by stronger demand from the retail channel.
The research house said initiatives such as the ongoing expansion of MFM’s Vietnamese subsidiary Vimaflour provide additional growth catalysts.
The Vimaflour expansion, which involves a capital expenditure of approximately US$20mil (RM80.09mil), is expected to raise production capacity by 20% to 2,500 tonnes per day upon its target completion at end-2027.
