PETALING JAYA: SD Guthrie Bhd
’s industrial development segment and land sales are emerging as key earnings catalysts, significantly diversifying the group’s earnings base beyond its integrated palm oil operations.
For the nine months (9M26) of financial year 2026 (FY26), its industrial development division recorded a pretax profit of RM770mil, with full-year FY26 contributions expected to reach RM800mil to RM1bil, depending on deal completion timings.
In the third quarter ended Sept 30, 2026 (3Q26), SD Guthrie recognised an RM81mil gain from the outright sale of 170 acres in Kluang, Johor.
Analysts now expect earnings momentum will build into 4Q26, with the recognition of land sales in Seberang Perai (RM253mil) and Port Dickson (RM89mil), as well as RM241.16mil in compensation for a compulsory land acquisition by Penang Development Corp.
Hong Leong Investment Bank (HLIB) Research said the disposal of 1,624 acres at Bukit Kerayong to a joint venture with YTL Power International Bhd and Bumi Assets Sdn Bhd is expected to contribute to earnings in 4Q26, while CGS International (CGSI) Research expects the same deal to be recognised in 1Q27.
“Stronger land disposal gains could also lead to higher dividends. We currently forecast dividend yields of 2.6%/3.3% for FY26/FY27,” CGSI Research wrote in its latest report on the group.
Beyond outright sales, SD Guthrie is capitalising on a roughly 22,000-acre co-development pipeline across industrial corridors and expanding into solar energy ventures, including a 680MWac hybrid solar and battery project for data centres.
The group’s core plantation business continues to provide solid operational support, anchored by robust upstream performance.
The upstream business is poised to benefit from strong crude palm oil (CPO) prices, which analysts and management project to range between RM4,500 and RM5,000 per tonne into 2027.
While prolonged dry weather in Kalimantan and Indonesia temporarily affected field operations in 3Q26, the lagged effects of El Nino on fresh fruit bunch (FFB) yields are expected to emerge in the first half of next year, reducing regional output and supporting CPO prices.
SD Guthrie’s midstream and downstream segments have experienced temporary margin compression due to higher raw material costs and inventory provisions, but its integrated operations offer a defensive buffer.
SD Guthrie reported a net profit of RM773mil, down 17.3% year-on-year (y-o-y), in 3Q26, primarily due to smaller land sale gains compared with the previous corresponding period.
Excluding one-off disposal gains and fair-value items, 3Q26 core net profit surged 39.4% y-o-y and 30% quarter-on-quarter (q-o-q) to RM693mil.
The group’s upstream profit before interest and tax jumped 48.2% y-o-y to RM935mil, driven by a 23% y-o-y increase in Indonesian FFB production as replanted areas reached prime maturity
This brought 9M26 core net profit to RM1.6bil, equivalent to 73% to 90% of full-year consensus and broker estimates.
Research houses maintained a bullish outlook on SD Guthrie.
CGSI Research reiterated its “add” rating with a target price (TP) of RM9.20 a share, citing CPO price tailwinds, non-core land monetisation and renewable energy (RE) ventures.
UOB Kay Hian Research maintained its “buy” rating on SD Guthrie with a TP of RM8.30 per share, based on a 19 times 2027 price-to-earnings (PE) multiple. It noted that forward PE multiples of 13.8 to 14.7 times remain undemanding.
Following an upward revision to its average CPO price assumptions and a downward adjustment to its FFB output assumptions for SD Guthrie, HLIB Research kept its FY26 core earnings forecast largely unchanged but raised its FY27 and FY28 core earnings forecasts by 16.9% to 18.8%.
Following the earnings revisions and a roll-forward of its valuation base year, the research house also maintained its “buy” call on the stock, with a higher sum-of-parts-derived TP of RM7.12 a share.
