| Key Information | Details |
|---|---|
| Investment Bank | TA SECURITIES |
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A prominent player in the plantation sector has captured the attention of TA Securities, which has issued a ‘Buy’ recommendation for the company. The investment bank set a target price of RM0.25, representing a significant 25.0% upside potential from its last traded price of RM0.20. This positive outlook comes amidst a period of evolving dynamics within the global vegetable oil market.
Performance Resilience
The company has demonstrated notable resilience in its recent financial performance, with analysts pointing to effective cost management and operational efficiencies as key drivers. Despite a challenging external environment characterised by moderating Crude Palm Oil (CPO) prices and intensified competition from rival oils, strategic initiatives have helped maintain a strong operational footing. These internal strengths are seen as crucial in mitigating broader market pressures.
Navigating Market Headwinds
The global plantation sector is currently navigating a landscape of shifting supply and demand. Recent trends indicate that CPO futures on Bursa Malaysia have slipped, reflecting weaker demand and rising global production. The United States Department of Agriculture (USDA)’s 2025/26 outlook suggests a more constructive production environment for global vegetable oils, with total output projected to increase. While this supply recovery is expected to cap upside for CPO prices, the company’s ability to adapt to these conditions, particularly through focused operational management, remains a key factor in its favourable assessment.
Future Positioning
Looking ahead, the company is strategically positioned to leverage the ongoing growth in global vegetable oil consumption, which is forecast to remain firm, largely driven by palm oil usage in food and biofuel applications. Palm oil is projected to be the primary driver of incremental supply, expected to reach 80 million tonnes and account for over 43% of the total increase in global vegetable oil production. The company’s ongoing commitment to improved estate management practices and cost optimisation positions it well to capture value despite the anticipated moderation of CPO prices to an average of around RM4,000/tonne in 2026.
TA Securities’ ‘Buy’ rating and target price of RM0.25 reflect confidence in the company’s intrinsic value and its strategic capability to deliver sustained performance in a dynamic market environment.
