Johor Plantations Group (JPG MK): CPO Price Premium Cushions Output Dip; Keep BUY
- Maintain BUY, with new MYR1.50 TP from MYR1.45, 12% upside with c.4% FY26F yield. Johor Plantations Group’s 1H25 earnings are in line with our and Street estimates. FFB output should improve in 2H25 as we head towards the peak output season in 3Q25, but this may be offset by moderating CPO ASPs. We continue to like JPG for its strong ESG credentials, and attractive valuation – the stock is trading at 12.8x FY26F P/E, which is at the low-end of its peer range of 12-15x.
- 2Q25 core earnings marginally improved 3% QoQ (+44% YoY) to MYR72.5m, bringing 1H25 core profit to MYR143m (+48% YoY). This is in line with our and consensus estimates, accounting for 52% of full-year forecasts. JPG declared a DPS of 1.3 sen in 2Q25, bringing 1H25 DPS to 2.3 sen (37% payout ratio).
- 1H25 FFB output dropped to -8% YoY (2Q25: +25% QoQ, -6% YoY), no thanks to the dry season weather in Johor, but JPG guided that from July onwards, weather conditions have been favourable. YTD-July, FFB output slightly improved to -6% YoY, albeit below our and management’s initial guidance of +3 to +5% for FY25. While JPG is hoping for a larger pick up in 2H25, with peak output in September/October, it has now targeted for a lower FFB growth target for FY25F, citing 0% to +5% YoY. We remain conservative, and trim our FFB growth estimates further to +1% for FY25 (from +3%) and +3% to +4% for FY26-27 (from +5%).
- JPG recorded 1H25 CPO ASPs of MYR4,605 (+11% YoY), ie a c.6% premium over the Malaysian Palm Oil Board (MPOB) price, while its PK ASP shot up by 53% YoY to MYR3,808/tonne (10% premium over the MPOB price), owing to the tight lauric oil market. As usual, JPG has secured a premium over the MPOB price for 70-80% of output in 2025 of MYR200-250/tonne. We keep our CPO ASP premium of 3% for FY25F-27F but adjusted our PK ASP premium to +6% for FY25F-27F, from +4.5%.
- CPO unit cost rose by 3% YoY to MYR2,263/tonne in 1H25 (vs our flattish unit cost assumption), due to weaker output. As JPG is targeting for production to pick up in 2H25, it maintains its FY25 cost assumption of MYR2,200-2,300/tonne (flattish YoY). In terms of application, JPG applied 49% of its FY25 fertiliser requirements in 1H25 (fertiliser tendered at prices lower at -11% YoY for FY25). We maintain our unit cost assumption.
- We trim earnings slightly by 3% for FY25F-26F and 4% for FY27F, after adjusting for lower FFB growth assumptions and higher PK ASP premium.
- Maintain BUY, with a higher MYR1.50 TP based on new 14x 2026F P/E, from 13x, at the higher end of its peers’ 12-15x. We believe this is justified given its robust ESG credentials which led to higher ASPs realised, and promising downstream prospects, starting in FY26F.
| Target Price (Return): | MYR1.50 (+12%) |
| Price (Market Cap): | MYR1.34 (USD795m) |
| ESG score: | 3.3 (out of 4) |
| Avg Daily Turnover (MYR/USD) | 4.53m/1.07m |
Analysts
Iftaar Hakim Rusli
+603 2302 8114
iftaar.hakim.rusli@rhbgroup.com
Hoe Lee Leng
+603 2302 8110
hoe.lee.leng@rhbgroup.com
Share Performance (%)
| YTD | 1m | 3m | 6m | 12m | |
|---|---|---|---|---|---|
| Absolute | (0.8) | 7.2 | 12.6 | 8.9 | 45.7 |
| Relative | 2.9 | 4.4 | 12.8 | 9.6 | 47.7 |
| 52-wk Price low/high (MYR) 0.92 – 1.45 | |||||
JPG MK (JPG MK) Price Chart
A line chart shows the price of JPG MK from August 2024 to August 2025, with its performance relative to the FBM KLCI index. The price shows a general upward trend from around 0.9 to 1.34 over the period.
Source: Bloomberg
Forecasts and Valuation
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover (MYRm) | 1,253 | 1,525 | 1,602 | 1,637 | 1,697 |
| Recurring net profit (MYRm) | 167 | 249 | 268 | 261 | 257 |
| Recurring net profit growth (%) | (67.3) | 48.8 | 7.6 | (2.6) | (1.7) |
| Recurring P/E (x) | 20.01 | 13.44 | 12.50 | 12.84 | 13.05 |
| P/B (x) | 1.5 | 1.2 | 1.1 | 1.1 | 1.0 |
| P/CF (x) | 8.64 | 6.78 | 10.50 | 6.22 | 7.68 |
| Dividend Yield (%) | na | 3.9 | 4.1 | 3.7 | 3.7 |
| EV/EBITDA (x) | 12.61 | 8.28 | 8.77 | 8.75 | 8.82 |
| Return on average equity (%) | 7.9 | 10.2 | 9.3 | 8.4 | 7.7 |
| Net debt to equity (%) | 66.3 | 37.2 | 41.5 | 36.1 | 33.7 |
Source: Company data, RHB
Overall ESG Score: 3.3 (out of 4)
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
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.
| Emissions (tCO2e) | 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: 3.3 (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
The chart shows JPG’s ESG rating over time. The rating was consistently 3.2 from August 2023 through August 2024, and increased to 3.3 in December 2024, where it has remained.
Source: RHB
Financial Exhibits
| Financial summary (MYR) | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Recurring EPS | 0.07 | 0.10 | 0.11 | 0.10 | 0.10 |
| DPS | 0.05 | 0.06 | 0.05 | 0.05 | |
| BVPS | 0.90 | 1.13 | 1.18 | 1.23 | 1.29 |
| Return on average equity (%) | 7.9 | 10.2 | 9.3 | 8.4 | 7.7 |
| Valuation metrics | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Recurring P/E (x) | 20.01 | 13.44 | 12.50 | 12.84 | 13.05 |
| P/B (x) | 1.5 | 1.2 | 1.1 | 1.1 | 1.0 |
| FCF Yield (%) | 6.5 | 10.4 | 0.6 | 8.6 | 6.2 |
| Dividend Yield (%) | 3.9 | 4.1 | 3.7 | 3.7 | |
| EV/EBITDA (x) | 12.61 | 8.28 | 8.77 | 8.75 | 8.82 |
| EV/EBIT (x) | 17.60 | 10.69 | 11.20 | 11.43 | 11.72 |
| Income statement (MYRm) | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Total turnover | 1,253 | 1,525 | 1,602 | 1,637 | 1,697 |
| Gross profit | 363 | 553 | 528 | 505 | 504 |
| EBITDA | 383 | 532 | 522 | 511 | 503 |
| Depreciation and amortisation | (109) | (120) | (113) | (120) | (125) |
| Operating profit | 275 | 413 | 409 | 391 | 379 |
| Net interest | (88) | (66) | (55) | (53) | (53) |
| Pre-tax profit | 187 | 346 | 354 | 338 | 326 |
| Taxation | (21) | (90) | (88) | (86) | (85) |
| Reported net profit | 167 | 257 | 268 | 255 | 244 |
| Recurring net profit | 167 | 249 | 268 | 261 | 257 |
| Cash flow (MYRm) | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Change in working capital | 92 | 26 | (115) | 108 | 5 |
| Cash flow from operations | 388 | 494 | 319 | 539 | 436 |
| Capex | (171) | (147) | (300) | (250) | (230) |
| Cash flow from investing activities | (168) | (283) | (291) | (243) | (226) |
| 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 | 113 | 154 |
| Net change in cash | 115 | 196 | (224) | 41 | (41) |
| Ending balance cash | 141 | 337 | 113 | 154 | 113 |
| Balance sheet (MYRm) | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Total cash and equivalents | 141 | 337 | 113 | 154 | 113 |
| Tangible fixed assets | 2,540 | 2,655 | 2,858 | 3,005 | 3,126 |
| Total assets | 4,582 | 4,960 | 4,857 | 5,093 | 5,161 |
| 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 | 2,006 | 1,945 |
| Total equity | 2,244 | 2,826 | 2,954 | 3,087 | 3,216 |
| Total liabilities & equity | 4,582 | 4,960 | 4,857 | 5,093 | 5,161 |
| Key metrics | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Revenue growth (%) | (28.4) | 21.7 | 5.1 | 2.2 | 3.7 |
| Recurrent EPS growth (%) | (67.3) | 48.8 | 7.6 | (2.6) | (1.7) |
| Gross margin (%) | 29.0 | 36.2 | 32.9 | 30.9 | 29.7 |
| Operating EBITDA margin (%) | 30.6 | 34.9 | 32.6 | 31.2 | 29.6 |
| Net profit margin (%) | 13.3 | 16.9 | 16.7 | 15.5 | 14.4 |
| Dividend payout ratio (%) | 0.0 | 51.0 | 51.3 | 49.1 | 51.3 |
| Capex/sales (%) | 13.6 | 9.6 | 18.7 | 15.3 | 13.6 |
| Interest cover (x) | 3.03 | 5.64 | 6.33 | 6.51 | 6.63 |
Results Review
| FYE Dec (MYRm) | 2Q24 | 1Q25 | 2Q25 | QoQ (%) | YoY (%) | 1H24 | 1H25 | YoY (%) | Comments |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 360.9 | 340.4 | 398.3 | 17.0 | 10.4 | 655.8 | 738.7 | 12.6 | Thanks to higher CPO (+11% YoY) and PK ASPs (+53% YoY), but offset by weaker FFB output (-8% YoY) |
| COGS | (245.8) | (213.9) | (256.9) | (20.1) | (4.5) | (442.5) | (470.8) | (6.4) | |
| Gross profit | 115.1 | 126.6 | 141.4 | 11.7 | 22.8 | 213.4 | 268.0 | 25.6 | |
| EBITDA | 113.1 | 134.4 | 149.5 | 11.3 | 32.2 | 218.4 | 283.9 | 30.0 | |
| EBITDA margin (%) | 31.3 | 39.5 | 37.5 | 33.3 | 38.4 | ||||
| Depr & amortisation | 29.6 | 27.6 | 32.6 | 17.9 | 9.9 | 58.1 | 60.2 | 3.6 | |
| EBIT | 83.4 | 106.8 | 116.9 | 9.5 | 40.2 | 160.3 | 223.7 | 39.5 | |
| EBIT margin (%) | 23.1 | 31.4 | 29.4 | 24.4 | 30.3 | ||||
| Interest expense | (19.0) | (13.2) | (12.6) | 4.3 | 33.7 | (33.4) | (25.8) | 22.7 | |
| EI/Others | (0.7) | 5.4 | 2.7 | (49.4) | 482.3 | 3.2 | 8.2 | 158.3 | |
| Pretax profit | 65.7 | 98.4 | 107.8 | 9.6 | 64.1 | 128.7 | 206.1 | 60.1 | |
| Pretax margin (%) | 18.2 | 28.9 | 27.1 | 19.6 | 27.9 | ||||
| Tax | (15.4) | (23.1) | (32.4) | (40.5) | (109.9) | (29.0) | (55.5) | (91.7) | |
| ETR (%) | 23.5 | 23.5 | 30.1 | 22.5 | 26.9 | ||||
| Reported profit | 49.7 | 75.9 | 75.2 | (1.0) | 51.2 | 99.7 | 151.1 | 51.6 | |
| Net Margin (%) | 13.8 | 22.3 | 18.9 | 15.2 | 20.5 | ||||
| Core profit | 50.5 | 70.5 | 72.5 | 2.7 | 43.6 | 96.6 | 143.0 | 48.1 | Met our and Street’s forecasts, at 52% of estimates |
| EPS (sen) | 2.44 | 3.04 | 3.01 | -1.0% | 23.4% | 4.9 | 6.1 | 23.7% | |
| Net DPS (sen) | 1.3 | 1.0 | 1.3 | 25.0% | 0.0% | 1.3 | 2.3 | 80.0% | |
| Operational Stats | |||||||||
| FFB production | 279,046 | 210,709 | 263,432 | 25% | -6% | 514,456 | 474,140 | (7.8) | Lower than our projection of +3% YoY |
| CPO production | 74,796 | 58,995 | 76,454 | 30% | 2% | 136,844 | 135,448 | (1.0) | |
| PK production | 19,123 | 15,457 | 19,563 | 27% | 2% | 35,155 | 35,020 | (0.4) | |
| CPO price, MYR/tonne | 4,211 | 4,969 | 4,331 | -13% | 3% | 4,144 | 4,605 | 11.1 | |
| PK price, MYR/tonne | 2,611 | 3,898 | 3,738 | -4% | 43% | 2,497 | 3,808 | 52.5 |
Source: Company data, RHB
Key assumptions for JPG
| FY23 | FY24F | FY25F | FY26F | FY27F | |
|---|---|---|---|---|---|
| Nucleus FFB production (tonnes) | 1,034,153 | 1,130,253 | 1,141,436 | 1,179,072 | 1,219,053 |
| % change | -7.0% | 9.3% | 1.0% | 3.3% | 3.4% |
| CPO price assumptions (MYR/tonne) | 3,989 | 4,331 | 4,223 | 4,120 | 4,120 |
| % change | -22.9% | 8.6% | -2.5% | -2.4% | 0.0% |
| PK price assumptions (MYR/tonne) | 2,223 | 2,875 | 3,449 | 3,344 | 3,344 |
| % change | -30.9% | 29.3% | 19.9% | -3.0% | 0.0% |
Source: Company data, RHB
Recommendation History
| Date | Recommendation | Target Price | Price |
|---|---|---|---|
| 2025-07-08 | Buy | 1.45 | 1.22 |
| 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.
