Malaysia Company Update
Johor Plantations Group (JPG MK) [Strong ESG Credentials And Fundamentals; Keep BUY]
9 July 2025
Johor Plantations Group (JPG MK)
Strong ESG Credentials And Fundamentals; Keep BUY
JPG MK (JPG MK) Price Chart
A line chart shows the JPG MK price close from July 2024 to June 2025, fluctuating between approximately 0.9 and 1.4. Another line shows its performance relative to the FBM KLCI (RHS), which ranges from about 115 to 171. The price shows a general uptrend from a low in mid-2024 to a peak in early 2025, followed by some volatility.
Source: Bloomberg
Forecasts and Valuation
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover (MYRm) | 1,253 | 1,525 | 1,637 | 1,702 | 1,794 |
| Recurring net profit (MYRm) | 167 | 252 | 277 | 269 | 268 |
| Recurring net profit growth (%) | (67.3) | 50.5 | 9.8 | (2.9) | (0.3) |
| Recurring P/E (x) | 17.92 | 11.91 | 10.84 | 11.16 | 11.20 |
| P/B (x) | 1.3 | 1.1 | 1.0 | 1.0 | 0.9 |
| P/CF (x) | 7.73 | 6.07 | 9.15 | 5.46 | 6.68 |
| Dividend Yield (%) | na | 4.4 | 4.6 | 4.2 | 4.2 |
| EV/EBITDA (x) | 11.70 | 7.63 | 7.91 | 7.87 | 7.83 |
| Return on average equity (%) | 7.9 | 10.2 | 9.6 | 8.7 | 8.0 |
| Net debt to equity (%) | 66.3 | 37.2 | 41.1 | 35.3 | 32.5 |
Source: Company data, RHB
E Score: 3.3 (EXCELLENT)
S Score: 3.7 (EXCELLENT)
G Score: 2.7 (GOOD)
Please refer to the ESG analysis on the next page
See important disclosures at the end of this report
Emissions And ESG
Trend analysis
In FY24, Scope 1 emissions remained flattish at 247.5k tonnes of CO2 equivalents (FY23:247.0k tonnes of CO2 equivalents). Meanwhile, its Scope 3 emissions reduced to 44.9k tonnes of CO2 equivalents (FY23: 55.1k tonnes of CO2 equivalents), bringing the total emissions to -3% YoY.
| Dec-22 | Dec-23 | Dec-24 | Dec-25 | |
|---|---|---|---|---|
| Scope 1 | 255,823 | 247,045 | 247,515 | – |
| Scope 2 | 208 | 231 | 181 | – |
| Scope 3 | 33,902 | 55,110 | 44,899 | – |
| Total emissions | 289,933 | 302,386 | 292,595 | na |
Source: Company data, RHB
Latest ESG-Related Developments
Sustainability certification: As of end 2024, 100% of JPG’s oil mills and estates are MSPO and RSPO certified.
Traceability: JPG achieved 100% traceability for both mills and plantations, or 93.96% (including external crops).
Smallholder inclusion: JPG is committed to help its smallholders to obtain certification from MSPO and RSPO (currently 289 out of 2,148 are certified vs 256 in 2023).
ESG Unbundled
Overall ESG Score: 3.2 (out of 4)
Last Updated: 2 July 2025
E Score: 3.3 (EXCELLENT)
JPG has managed to reduce its GHG emissions intensity to 0.89/tonnes of CO2 in 2024 from 2020. The company is fully MSPO- and RSPO-certified for all its palm oil mills and estates. As at FY24, JPG is also targeting to help smallholders obtain SPO and RSPO certification to further bolster the production of sustainable oil palm products.
S Score: 3.7 (EXCELLENT)
JPG is dedicated to ensuring free, prior, and informed consent for all employees. Its fatality rate remained zero for the last four years, and it also has adopted a “zero recruitment cost” for foreign workers.
G Score: 2.7 (GOOD)
56% of JPG’s board members are independent, and 22% of its directors are women, with full disclosure on remuneration including salaries and bonuses on a named basis. It has an in-house investor relations team and holds investor meetings regularly, embodying good transparency and disclosure practices.
ESG Rating History
A line chart shows JPG’s ESG rating history from July 2023 to July 2025. The rating remained stable at 3.2 for most of the period, with a brief dip to 3.1 in May 2025 before returning to 3.2.
Source: RHB
See important disclosures at the end of this report
Financial Exhibits
Asia
Malaysia
Agriculture
Johor Plantations Group
JPG MK
Buy
Valuation basis
Target P/E of 13x on Dec-2026F earnings
Key drivers
i. CPO price increase;
ii. Higher FFB production output;
iii. Increased demand for sustainable palm oil.
Key risks
i. CPO price volatility;
ii. Weather risks;
iii. Negative effect of a change in the demand and supply dynamics of the global vegetable oil industry.
Company Profile
Johor Plantations Group is an upstream oil palm plantation company operating mainly in Johor, Malaysia, focusing on cultivation of oil palm and FFB production.
Financial summary (MYR)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring EPS | 0.07 | 0.10 | 0.11 | 0.11 | 0.11 |
| DPS | 0.05 | 0.06 | 0.05 | 0.05 | |
| BVPS | 0.90 | 1.13 | 1.18 | 1.24 | 1.30 |
| Return on average equity (%) | 7.9 | 10.2 | 9.6 | 8.7 | 8.0 |
Valuation metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring P/E (x) | 17.92 | 11.91 | 10.84 | 11.16 | 11.20 |
| P/B (x) | 1.3 | 1.1 | 1.0 | 1.0 | 0.9 |
| FCF Yield (%) | 7.2 | 11.6 | 0.9 | 10.0 | 7.3 |
| Dividend Yield (%) | 4.4 | 4.6 | 4.2 | 4.2 | |
| EV/EBITDA (x) | 11.70 | 7.63 | 7.91 | 7.87 | 7.83 |
| EV/EBIT (x) | 16.33 | 9.84 | 10.04 | 10.22 | 10.31 |
Income statement (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover | 1,253 | 1,525 | 1,637 | 1,702 | 1,794 |
| Gross profit | 363 | 553 | 542 | 520 | 526 |
| EBITDA | 383 | 532 | 534 | 521 | 518 |
| Depreciation and amortisation | (109) | (120) | (113) | (120) | (125) |
| Operating profit | 275 | 413 | 420 | 401 | 393 |
| Net interest | (88) | (66) | (55) | (53) | (52) |
| Pre-tax profit | 187 | 346 | 365 | 348 | 341 |
| Taxation | (21) | (90) | (91) | (89) | (88) |
| Reported net profit | 167 | 257 | 277 | 262 | 255 |
| Recurring net profit | 167 | 252 | 277 | 269 | 268 |
Cash flow (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Change in working capital | 92 | 26 | (115) | 111 | 7 |
| Cash flow from operations | 388 | 494 | 328 | 550 | 449 |
| Capex | (171) | (147) | (300) | (250) | (230) |
| Cash flow from investing activities | (168) | (283) | (291) | (243) | (225) |
| Dividends paid | 0 | (63) | (138) | (125) | (125) |
| Cash flow from financing activities | (104) | (15) | (252) | (255) | (252) |
| Cash at beginning of period | 25 | 141 | 337 | 122 | 174 |
| Net change in cash | 115 | 196 | (215) | 52 | (28) |
| Ending balance cash | 141 | 337 | 122 | 174 | 145 |
Balance sheet (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total cash and equivalents | 141 | 337 | 122 | 174 | 145 |
| Tangible fixed assets | 2,540 | 2,655 | 2,858 | 3,005 | 3,126 |
| Total assets | 4,582 | 4,960 | 4,866 | 5,117 | 5,200 |
| Short-term debt | 213 | 56 | 56 | 56 | 56 |
| Total long-term debt | 1,414 | 1,332 | 1,282 | 1,212 | 1,142 |
| Total liabilities | 2,339 | 2,133 | 1,903 | 2,013 | 1,957 |
| Total equity | 2,244 | 2,826 | 2,962 | 3,103 | 3,243 |
| Total liabilities & equity | 4,582 | 4,960 | 4,866 | 5,117 | 5,200 |
Key metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Revenue growth (%) | (28.4) | 21.7 | 7.4 | 3.9 | 5.4 |
| Recurrent EPS growth (%) | (67.3) | 50.5 | 9.8 | (2.9) | (0.3) |
| Gross margin (%) | 29.0 | 36.2 | 33.1 | 30.6 | 29.3 |
| Operating EBITDA margin (%) | 30.6 | 34.9 | 32.6 | 30.6 | 28.8 |
| Net profit margin (%) | 13.3 | 16.9 | 16.9 | 15.4 | 14.2 |
| Dividend payout ratio (%) | 0.0 | 51.0 | 49.7 | 47.7 | 49.0 |
| Capex/sales (%) | 13.6 | 9.6 | 18.3 | 14.7 | 12.8 |
| Interest cover (x) | 3.03 | 5.64 | 6.51 | 6.68 | 6.89 |
Source: Company data, RHB
See important disclosures at the end of this report
Figure 1: JPG’s progress on ESG factors
| ENVIRONMENT | 2022 | 2023 | 2024 | |
|---|---|---|---|---|
| GHG emissions | Emissions (tCO2e) | 338,709 | 314,946 | 331,859 |
| GHG emissions | Intensity (tCO2e per tonne of palm product) | 0.93 | 0.92 | 0.89 |
| Waste treatment | Recycling/Repurposing of waste | Yes | Yes | Yes |
| Energy efficiency (water) | Water usage (m3) and intensity (m3/tonne of palm product) | 1,528,116 | 1,545,838 | 1,591,861 |
| Energy efficiency | Energy consumption and intensity | 243,433.00 | 218,824.00 | 228,932.00 |
| Certifications | RSPO/MSPO/ISPO certified (%) | RSPO: 100% MSPO: 100% ISPO: N/A |
RSPO: 100% MSPO: 100% ISPO: N/A |
RSPO: 100% MSPO: 100% ISPO: N/A |
| Use of peat land | Peat land (%) | 2.3% | 2.3% | 2.1% |
| Fire accidents | Number of accidents | N/A | None | None |
| Usage of renewable energy | % of renewable energy used | 57.0% | 62.1% | 62.1% |
| Traceability | Traceable to mills (%) | 100.00% | 100.00% | 100.00% |
| Traceable to plantation (%) | 87.52% | 85.86% | 93.96% | |
| SOCIAL | ||||
| Channels for workers to raise concerns | Existence of grievance channels to raise concerns | Yes | Yes | Yes |
| Whistleblowing policy | Policies to protect whistleblowers | Yes | Yes | Yes |
| Employees’ professional/personal development | Provision of training and education | Yes | Yes | Yes |
| Policy for smallholders | Policy in place for training, yield improvement and RSPO certification | Yes | Yes | Yes |
| Employees’ welfare | Accommodation and amenities provided | Yes | Yes | Yes |
| GOVERNANCE | ||||
| Board composition | At least half of the board being independent directors | 6/10 are independent | 5/9 are independent | |
| Limiting to nine years (for independent directors) | Limitation of tenure to nine years (for independent directors) | Not applicable | Not applicable | Not applicable |
| Gender inclusivity | Female representation in the board | 30% | 22.2% | |
| Emphasis of sustainability at board level | Formation of a sustainability group | Yes | Yes | Yes |
| Remuneration transparency | Full disclosure of fees and benefits on named basis | Yes | Yes | Yes |
Source: Company data, RHB
Figure 2: Key assumptions for JPG
| FY22 | FY23 | FY24F | FY25F | FY26F | FY27F | ||
|---|---|---|---|---|---|---|---|
| Nucleus FFB production (tonnes) | 1,111,496 | 1,034,153 | 1,130,253 | 1,166,689 | 1,219,317 | 1,282,415 | |
| % change | 7.4% | -7.0% | 9.3% | 3.2% | 4.5% | 5.2% | |
| CPO price assumptions (MYR/tonne) | 5,177 | 3,989 | 4,331 | 4,223 | 4,120 | 4,120 | |
| % change | 17.1% | -22.9% | 8.6% | -2.5% | -2.4% | 0.0% | |
| PK price assumptions (MYR/tonne) | 3,218 | 2,223 | 2,875 | 3,449 | 3,449 | 3,449 | |
| % change | 11.5% | -30.9% | 29.3% | 19.9% | 0.0% | 0.0% | |
Source: Company data, RHB
See important disclosures at the end of this report
Recommendation Chart
A line chart displays the price close of JPG MK from July 2024 to May 2025. The price fluctuates, starting below 1.00, rising to a peak of around 1.35, and then settling around 1.20. Markers on the chart indicate ‘Buy’ recommendations with target prices (TP) at various points: TP 1.20, TP 1.50, TP 1.55, TP 1.65, and TP 1.55.
Source: RHB, Bloomberg
| Date | Recommendation | Target Price | Price |
|---|---|---|---|
| 2025-05-19 | Buy | 1.55 | 1.18 |
| 2025-02-18 | Buy | 1.65 | 1.16 |
| 2024-11-14 | Buy | 1.55 | 1.32 |
| 2024-11-11 | Buy | 1.50 | 1.35 |
| 2024-09-06 | Buy | 1.20 | 0.99 |
Source: RHB, Bloomberg
See important disclosures at the end of this report
RHB Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
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