| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A recent fire incident at a poultry farm in Juru, Penang, is expected to have a very minimal impact on the company’s operations and earnings, according to a recent investment bank research report. The incident, which occurred on the night of December 29, 2025, involved a single chicken coop, with damage contained and operations anticipated to resume normally within a few months.
Incident Overview
The fire affected one chicken coop housing approximately 9,000 chickens, resulting in the fatality of around 7,200 birds, while the remaining 1,800 suffered smoke exposure. The internal structure of the affected coop sustained an estimated 50% damage. Fortunately, no injuries were reported, and the fire did not impact any surrounding facilities. Firefighting operations were swiftly completed on the same night, and the incident has since been handed over for investigation.
Minimal Financial and Operational Disruption
The investment bank views the incident as having a negligible effect on the company’s broader production and financial standing. The affected 9,000 chickens represent only about 0.1% of the company’s upstream monthly production capacity of 6.5 million birds. The damage was isolated to a specific part of the facility rather than the entire plant, with repair and maintenance works projected to be finalized within one to three months. Full operational capacity is expected to be restored thereafter.
The estimated repair cost of RM200,000 to RM300,000 is considered manageable and is fully covered under insurance, with claims expected to be settled within four to six months. Consequently, the report does not foresee any material disruption to the company’s production, financial performance, or its overall investment thesis.
Investment Recommendation Maintained
Given the minimal impact and comprehensive insurance coverage for the fire incident, the investment bank has maintained its earnings forecast for the company. The “Buy” recommendation has also been reiterated, with an unchanged Target Price (TP) of RM0.89. This target price is derived based on a Price-to-Earnings (P/E) ratio of 5.5x, pegged to the forecasted Earnings Per Share (EPS) of 16.23 sen for FY26f.
