SD GUTHRIE BERHAD: Beats Expectations
DESCRIPTION
One of the world’s leading integrated palm oil plantation players
KEY STOCK DATA
| 12-mth Target Price | RM5.25 |
| Current Price | RM4.77 |
| Expected Return | +10.0% |
| Previous Target Price | RM4.89 |
| Market | Main |
| Sector | Plantations |
| Bursa Code | 5285 |
| Bloomberg Ticker | SDPL MK |
| Shariah-compliant | Yes |
SHARE PRICE PERFORMANCE
| 1M | 3M | 6M | |
|---|---|---|---|
| Absolute Returns | -0.6 | 5.4 | 0.5 |
| Relative Returns | -0.2 | 1.9 | -1.0 |
MAJOR SHAREHOLDERS
| % | |
|---|---|
| Skim Amanah Saham Bumiputera | 45.6 |
| Employees Provident Fund | 16.8 |
| Kumpulan Wang Persaraan | 7.3 |
Chong Hoe Leong
T 603 2268 3015
F 603 2268 3014
E chonghoeleong@publicinvestbank.com.my
SD Guthrie Berhad delivered a stronger-than-expected performance in 1HFY25, surpassing the RM1bn mark in core profit. The outperformance was driven by robust contributions across all upstream plantation segments, supported by higher CPO prices and increased FFB production. Results exceeded both our and consensus full-year expectations, accounting for 64% and 61.8%, respectively. In light of the solid 1H performance, we revise our FY25-27F earnings forecasts upward by 7%-8%, factoring in higher assumptions for FFB production and oil extraction rate (OER). We maintain our Neutral recommendation with a revised target price of RM5.25, based on 20x FY26 EPS. A first interim dividend of 7.75 sen was declared (2QFY24: 4.65 sen).
- 2QFY25 revenue grew 4% to RM5.2bn. The group’s sales grew from RM4.9bn to RM5.1bn, as stronger sales in upstream Malaysia (+2.1% YoY), upstream Indonesia (+36.7% YoY) and downstream segments (+3.2% YoY) were partially offset by weaker sales from upstream PNG (-27% YoY). 2QFY25 average CPO price rose from RM4,029/mt to RM4,146/mt (Malaysia: RM4,232/mt, Indonesia: RM3,643/mt and PNG: RM4,494/mt) while 2QFY25 FFB production climbed 4% YoY to 2.29m mt, led by stronger production from Malaysia (+2% YoY), Indonesia (+9% YoY) and PNG (+4% YoY). OER rose from 20.82% to 21.19% (Malaysia: 20.76%, Indonesia: 21.24%, and PNG: 22.05%). Meanwhile, downstream sales rose from RM4.2bn to RM4.4bn, led by improved capacity utilisation from 42% to 50%.
- Core profit grew to RM505m. The group’s core profit rose from RM415m to RM505m, boosted by stronger earnings from all the units except downstream. Upstream Malaysia PBIT earnings surged 42.7% YoY to RM294m. Upstream Indonesia earnings jumped 54.2% YoY to RM165m and upstream PNG earnings soared 81.1% YoY to RM201m. 2QFY25 СРО production cost averaged at RM2,445/mt (Malaysia: RM2,690/mt, Indonesia: RM2,170/mt and PNG: RM2,170/mt) with 1HFY25 averaging at RM2,600/mt. On the other hand, downstream earnings tumbled 44% YoY to RM126m, dampened by weaker earnings contributions from the differentiated market segment due to margin compression and lower premium in the Europe and Asian regions while bulk segment made a small loss of RM3m due to weaker demand compounded by margin compression in all regions.
- Prospects. Management sees muted impact from the US tariff as main rival, Indonesia also faces similar tariff rate. Moreover, the US market only made up 2% of its total export volume. Meanwhile, it expects RM500m-700m sales from the land monetisation this year. On the 2H production outlook, it projects better production from Malaysia and PNG/SI, while Indonesia is likely to remain flattish or a decline compared to the 1H. Overall, it expects full-year production growth of 3-5%. CPO production cost is expected to be lower in the 2H on the back of higher production with a full-year assumption of RM2,500/mt. Lastly, it also highlighted that less than 3% of its 180,000ha planted area in Indonesia is currently reviewed by Indonesian authorities.
KEY FINANCIAL SUMMARY
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F | CAGR |
|---|---|---|---|---|---|---|
| Revenue | 18,427.9 | 19,831.0 | 18,882.3 | 19,091.9 | 18,919.8 | -1.6% |
| Gross Profit | 1,608.8 | 2,474.0 | 2,355.6 | 2,381.8 | 2,360.3 | -1.6% |
| Pre-tax Profit | 2,752.5 | 3,139.3 | 2,446.7 | 2,460.8 | 2,473.5 | -7.6% |
| Core Net Profit | 842.0 | 1,607.0 | 1,803.7 | 1,814.1 | 1,823.5 | 4.3% |
| EPS (Sen) | 12.2 | 23.2 | 26.1 | 26.2 | 26.4 | 4.3% |
| P/E (x) | 39.2 | 20.5 | 18.3 | 18.2 | 18.1 | |
| DPS (Sen) | 15.0 | 16.4 | 13.4 | 13.5 | 13.6 | |
| Dividend Yield (%) | 3.1 | 3.4 | 2.8 | 2.8 | 2.8 |
Table 1: Results Summary
| FY Dec (RMm) | 2Q25 | 2Q24 | 1Q25 | QoQ chg (%) | YoY chg (%) | FY25 | FY24 | YoY chg (%) | Comments |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 5,169 | 4,965 | 4,817 | 7.3 | 4.1 | 9,986 | 9,307 | 7.3 | Mainly contributed by stronger sales from all core segments except upstream PNG/SI |
| Operating expenses | -4,434 | -4,367 | -4,078 | 8.7 | 1.5 | -8,512 | -8,315 | 2.4 | |
| Gross profit | 735 | 598 | 739 | -0.5 | 22.9 | 1,474 | 992 | 48.6 | |
| Other operating income | 41 | 24 | 97 | -57.7 | 70.8 | 138 | 68 | >100 | |
| Other gains/(losses) | 26 | -2 | -10 | <-100 | <-100 | 16 | -50 | <-100 | |
| Operating profit | 802 | 620 | 826 | -2.9 | 29.4 | 1,628 | 1,010 | 61.2 | |
| Share of results of JCE and associates | 2 | 9 | -8 | -125.0 | -77.8 | -6 | -5 | 20.0 | |
| Finance income | 5 | 6 | 6 | -16.7 | -16.7 | 11 | 13 | -15.4 | |
| Finance costs | -26 | -40 | -25 | 4.0 | -35.0 | -51 | -77 | -33.8 | |
| Pre-tax profit | 783 | 595 | 799 | -2.0 | 31.6 | 1,582 | 941 | 68.1 | |
| Tax expense | -234 | -136 | -183 | 27.9 | 72.1 | -417 | -229 | 82.1 | |
| Net profit | 549 | 459 | 616 | -10.9 | 19.6 | 1,165 | 712 | 63.6 | |
| Core net profit | 505 | 415 | 567 | -10.9 | 21.7 | 1,072 | 626 | 71.2 | Driven by stronger results from all core segments except downstream |
| Core EPS (sen) | 7.3 | 6.0 | 8.2 | -10.9 | 21.7 | 15.5 | 9.1 | 71.2 | |
| DPS (sen) | 7.8 | 4.7 | 0.0 | – | – | 7.8 | 4.7 | 66.7 | Ex-date: 16 Oct 2025 |
| Gross Margin (%) | 14.2 | 12.0 | 15.3 | – | – | 14.8 | 10.7 | – | |
| Pre-tax Margin (%) | 15.1 | 12.0 | 16.6 | – | – | 15.8 | 10.1 | – | |
| Net Margin (%) | 10.6 | 9.2 | 12.8 | – | – | 11.7 | 7.7 | – | |
| Effective tax rate (%) | 29.9 | 22.9 | 22.9 | – | – | 26.4 | 24.3 | – | Higher effective tax rate due to withholding tax on dividends from foreign subsidiaries |
| Average CPO price (RM/mt ex-mill) | 4,146 | 4,029 | 4,576 | -9.4 | 2.9 | 4,339 | 3,961 | 9.5 | |
| FFB Production (m mt) | 2.29 | 2.20 | 2.00 | 14.5 | 4.1 | 4.29 | 4.17 | 2.9 | |
| OER (%) | 21.19 | 20.82 | 21.17 | 0.1 | 1.8 | 21.18 | 21.00 | 0.9 |
Table 2: Segmental Breakdown
| FY Dec (RMm) | 2Q25 | 2Q24 | 1Q25 | QoQ chg (%) | YoY chg (%) | FY25 | FY24 | YoY chg (%) | Comments |
|---|---|---|---|---|---|---|---|---|---|
| Revenue: | |||||||||
| Upstream Malaysia | 295 | 289 | 199 | 48.2 | 2.1 | 494 | 462 | 6.9 | Supported by an increased CPO recorded selling price and higher FFB production |
| Upstream Indonesia | 354 | 259 | 335 | 5.7 | 36.7 | 689 | 465 | 48.2 | Driven by an increase in FFB production, partially offset by a marginal drop in CPO recorded price |
| Upstream PNG | 81 | 111 | 59 | 37.3 | -27.0 | 140 | 172 | -18.6 | |
| Downstream | 4,419 | 4,281 | 4,208 | 5.0 | 3.2 | 8,627 | 8,151 | 5.8 | Led by improved sales volume from the Oceanian operation |
| Others | 20 | 25 | 16 | 25.0 | -20.0 | 36 | 57 | -36.8 | |
| Total Revenue | 5,169 | 4,965 | 4,817 | 7.3 | 4.1 | 9,986 | 9,307 | 7.3 | |
| Profit before interest & tax: | |||||||||
| Upstream Malaysia | 294 | 206 | 285 | 3.2 | 42.7 | 579 | 324 | 78.7 | Bolstered by higher OER and a jump in PK selling prices |
| Upstream Indonesia | 165 | 107 | 209 | -21.1 | 54.2 | 374 | 191 | 95.8 | Driven by stronger OER and a jump in PK selling prices |
| Upstream PNG | 201 | 111 | 259 | -22.4 | 81.1 | 460 | 174 | 164.4 | On the back of higher OER |
| Downstream | 126 | 225 | 81 | 55.6 | -44.0 | 202 | 346 | -41.6 | Weakened by lower margins from refineries across Asian and European regions, compounded by lower share of profit |
| Renewable Energy | 0 | 0 | -1 | – | – | -4 | -2 | 100.0 | |
| Industrial Development | 0 | 0 | – | – | – | 0 | 0 | – | |
| Others | 18 | -3 | -7 | <-100 | <-100 | 11 | -1 | <-100 | Underpinned by profit contribution from agri services business and research operations |
| Total PBIT | 804 | 646 | 826 | -2.7 | 24.5 | 1,622 | 1,032 | 57.2 | |
Table 3: Age Profile (11.6 years)
- Immature: 10%
- 4-8 years: 33%
- 9-18 years: 27%
- 19-22 years: 17%
- Above 22 years: 13%
KEY FINANCIAL DATA
INCOME STATEMENT DATA
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Revenue | 18,427.9 | 19,831.0 | 18,882.3 | 19,091.9 | 18,919.8 |
| Gross Profit | 1,608.8 | 2,474.0 | 2,355.6 | 2,381.8 | 2,360.3 |
| EBITDA | 4,359.3 | 4,711.1 | 4,044.8 | 4,076.7 | 4,110.9 |
| Net Finance Income/ (cost) | -174.8 | -119.1 | -182.2 | -144.3 | -110.1 |
| Others | 39.8 | -27.9 | 23.3 | 23.3 | 23.3 |
| Pre-tax Profit | 2,752.5 | 3,139.3 | 2,446.7 | 2,460.8 | 2,473.5 |
| Income Tax | -719.1 | -795.8 | -587.2 | -590.6 | -593.6 |
| Effective Tax Rate (%) | 26.1 | 25.3 | 24.0 | 24.0 | 24.0 |
| Core Net Profit | 842.0 | 1,607.0 | 1,803.7 | 1,814.1 | 1,823.5 |
| Growth | |||||
| Revenue | -12.4 | 7.6 | -4.8 | 1.1 | -0.9 |
| Gross Profit | -40.0 | 53.8 | -4.8 | 1.1 | -0.9 |
| Core Profit | -62.1 | 90.9 | 12.2 | 0.6 | 0.5 |
BALANCE SHEET DATA
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Fixed Assets | 19,145.3 | 19,364.7 | 19,348.8 | 19,277.3 | 19,150.0 |
| Other Long-term Assets | 6,366.4 | 6,135.3 | 6,135.3 | 6,135.3 | 6,135.3 |
| Cash At Bank | 830.4 | 625.4 | 1,708.1 | 2,684.5 | 3,776.5 |
| Other Current Assets | 5,544.4 | 5,921.5 | 5,670.4 | 5,725.9 | 5,680.3 |
| Total Assets | 31,886.5 | 32,046.9 | 32,862.6 | 33,822.9 | 34,742.1 |
| ST Borrowings | 1,700.6 | 1,741.9 | 1,741.9 | 1,741.9 | 1,741.9 |
| LT Borrowings | 3,581.7 | 3,360.2 | 3,360.2 | 3,360.2 | 3,360.2 |
| Trade payables | 2,385.8 | 2,384.4 | 2,270.3 | 2,295.5 | 2,274.8 |
| Other Liabilities | 3,811.9 | 3,399.8 | 3,399.8 | 3,399.8 | 3,399.8 |
| Total Liabilities | 11,480.0 | 10,886.3 | 10,772.2 | 10,797.4 | 10,776.7 |
| Shareholders’ Equity & Minority | 20,406.5 | 21,160.6 | 22,090.4 | 23,025.5 | 23,965.4 |
| Total Equity and Liabilities | 31,886.5 | 32,046.9 | 32,862.6 | 33,822.9 | 34,742.1 |
PER SHARE DATA & RATIOS
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Book Value Per Share | 3.0 | 3.1 | 3.2 | 3.3 | 3.5 |
| NTA Per Share | 2.5 | 2.6 | 2.8 | 2.9 | 3.0 |
| EPS (Sen) | 12.2 | 23.2 | 26.1 | 26.2 | 26.4 |
| DPS (Sen) | 15.0 | 16.4 | 13.4 | 13.5 | 13.6 |
| Payout Ratio (%) | 51.0 | 48.3 | 50.0 | 50.0 | 50.0 |
| ROA (%) | 6.4 | 7.3 | 5.7 | 5.5 | 5.4 |
| ROE (%) | 10.0 | 11.1 | 8.4 | 8.1 | 7.8 |
DISCLAIMER
This document has been prepared solely for information and private circulation only. It is for distribution under such circumstances as may be permitted by applicable law. The information contained herein is prepared from data and sources believed to be reliable at the time of issue of this document. The views/opinions expressed herein are subject to change without notice and solely reflects the personal views of the analyst(s) acting in his/her capacity as employee of Public Investment Bank Berhad (“PIVB”). PIVB does not make any guarantee, representations or warranty neither expressed or implied nor accepts any responsibility or liability as to its fairness liability adequacy, completeness or correctness of any such information and opinion contained herein. No reliance upon such statement or usage by the addressee/anyone shall give rise to any claim/liability for loss of damage against PIVB, Public Bank Berhad, its affiliates and related companies, directors, officers, connected persons/employees, associates or agents.
This document is not and should not be construed or considered as an offer, recommendation, invitation or a solicitation of an offer to purchase or subscribe or sell any securities, related investments or financial instruments. Any recommendation in this document does not have regards to the specific investment objectives, financial situation, risk profile and particular needs of any specific persons who receive it. We encourage the addressee of this document to independently evaluate the merits of the information contained herein, consider their own investment objectives, financial situation, particular needs, risks and legal profiles, seek the advice of their, amongst others, tax, accounting, legal, business professionals and financial advisers before participating in any transaction in respect of any of the securities of the company(ies) covered in this document.
PIVB, Public Bank Berhad, our affiliates and related companies, directors, officers, connected persons/employees, associates or agents may own or have positions in the securities of the company(ies) covered in this document or any securities related thereto and may from time to time add or dispose of, or may be materially interested in, any such securities. Further PIVB, Public Bank Berhad, our affiliates and related companies, associates or agents do and/or seek to do business with the company(ies) covered in this document and may from time to time act as market maker or have assumed an underwriting commitment in the securities of such company(ies), may sell them or buy them from customers on a principal basis, may have or intend to accommodate credit facilities or other banking services and may also perform or seek to perform investment banking, advisory or underwriting services for or relating to such company(ies) as well as solicit such investment advisory or other services from any entity mentioned in this document. The analyst(s) and associate analyst(s) principally responsible for the preparation of this document may participate in the solicitation of businesses described aforesaid and would receive compensation based upon various factors, including the quality of research, investor client feedback, stock pickings and performance of his/her recommendation and competitive factors. Hence, the addressee or any persons reviewing this document should be aware of the foregoing, amongst others, may give rise to real or potential conflicts of interest.
