PETALING JAYA: Oil palm planter TSH Resources Bhd
is expected to post third quarter ended Sept 30, 2026 (3Q26) core profit after tax and minority interests (Patami) of RM55mil to RM60mil, which is up quarter-on-quarter (q-o-q) and year-on-year (y-o-y), says RHB Research.
The brokerage said the improvement should be driven by higher crude palm oil (CPO) and palm kernel (PK) production on a q-o-q and y-o-y basis, and supported further by firmer prices. The spot CPO price rose 1% q-o-q and 6% y-o-y, while the price of PK was up 5% y-o-y and flat q-o-q.
Accordingly, RHB Research has adjusted financial year ending Dec 31, 2026 (FY26) earnings up by 1.2%, a decline of 2.7% in FY27, and a rise of 1.4% in FY28 following adjustments to unit costs and applying its latest foreign-exchange assumptions.
It has maintained a “buy” call on the stock with a new lower target price of RM1.40 from RM1.45, based on 12 times FY27 price-to-earnings.
“Kalimantan, which accounts for two-thirds of TSH’s Indonesian landbank, has seen low and sporadic rainfall since July.
“This water deficit has induced moisture stress – evidenced by four to five unopened spears per palm. In contrast, estates in Sabah and West Sumatra continue to receive regular rainfall and show no signs of stress,” RHB Research noted.
It said while year-to-September fresh fruit bunch (FFB) production was down 2.2%, the company expects output to catch up and close roughly flat y-o-y, before peaking in November.
“For FY27, management has guided for 5% y-o-y growth, assuming normal rainfall. Given the ongoing strong or very strong El Nino risk, we remain conservative and maintain our FFB growth forecasts at minus 2.1% y-o-y and minus 2.7% y-o-y for FY26 to FY27.”
