PETALING JAYA: Guan Chong Bhd
’s upcoming results for the third quarter of financial year 2026 (3Q26) will be backed by stronger demand, healthy combined ratios and lower bean, financing and hedging costs amid a cheaper bean price environment, says RHB Research.
The brokerage, which expects a record year for the world’s fourth largest cocoa grinder, said in a note to clients: “We expect it to chalk higher year-on-year (y-o-y) and quarter-on-quarter for the 3Q26 numbers.”
For context, the global cocoa grinding data points towards a broad-based demand recovery.
Asia grinding data recorded 29% y-o-y growth to 234,000 tonnes in 3Q26, whereas the Ivory Coast Exporters Association’s (GEPEX) total grindings were up by 40% y-o-y to 157,000 tonnes.
Malaysia cocoa grinding data is also supportive of an improving outlook – it rose by 17.1% y-o-y to 89,000 tonnes.
Against the backdrop of recovering grinding demand, RHB Research expects higher utilisation rates and healthier ratios leading to improved profitability in 2H26 earnings outlook.
This should be complemented by a more favourable operating environment, with lower input costs, namely cocoa bean and working capital.
Meanwhile, Guan Chong’s management proactively positioned its inventory to secure sufficient bean supply at favourable prices and implemented an effective hedging strategy, in anticipation of a potentially strong El Nino.
While the cocoa butter ratio remains subdued, RHB Research noted elevated powder ratios should cushion the impact and support overall grinding margins.
Guan Chong’s FY27 capacity will be supported by the second phase of its Ivory Coast expansion, which is now fully commissioned, bringing the group’s total cocoa grinding capacity to 395,000 tonnes per annum, the brokerage added.
RHB Research said there could be upside risks to its earnings forecasts on Guan Chong but “we remain prudent and prefer to await the group’s upcoming results release before making any revisions”.
The brokerage maintained its “buy” call on the stock and kept the target price at RM2 per share.
Key risks to its call include sharp raw material price fluctuations, weakening demand and execution and country risks.
