Latest news with #RM4.80
The Star
03-05-2025
- Business
- The Star
Termination of egg subsidy uplifts poultry stocks
CGSI Research raised concerns that the removal of the egg subsidies could impact QL Resources' expansion plans. PETALING JAYA: The stock market reacted positively to the removal of the subsidy and price control for chicken eggs, with most poultry stocks rising following the announcement by the Agriculture and Food Security Ministry. However, the largest listed poultry company by market capitalisation – QL Resources Bhd – declined marginally by 0.21% to RM4.80, valuing the group at RM17.5bil. Last December, CGS International (CGSI) Research raised concerns that the removal of the egg subsidies could impact QL Resources' expansion plans. It estimated that the group's pre-tax margins could ease by 0.4% year-on-year to 9.1% in the financial year 2026 (FY26), as the egg subsidies are reduced. Nonetheless, the decision to end egg subsidies lifted other poultry players. Teo Seng Capital Bhd , which produces more than four million chicken eggs daily, saw its share price hitting the highest level in over a month. The stock rose by 5.15% to RM1.02, while shares of PWF Corp Bhd and Lay Hong Bhd climbed by 4.61% and 4.69%, respectively. Other poultry stocks that moved north were Leong Hup International Bhd (1.63%), CCK Consolidated Holdings Bhd (1.55%) and Malayan Flour Mills Bhd (2.02%). CAB Cakaran Corp Bhd's share price remained unchanged at 53.5 sen after paring down earlier losses during the day. In a statement, the government announced the decision to scrap the price control on chicken eggs and reduce the egg subsidy rate from 10 sen to five sen per egg, effective today. Subsequently, the egg subsidy will be completely abolished on Aug 1, 2025. From February 2022 to December 2024, the government spent nearly RM2.5bil on egg subsidies to the industry to cover rising production costs due to the Covid-19 pandemic and the impact of the Ukraine-Russia war on the import prices of soybeans and corn. In deciding to remove the price control and subsidy, the Agriculture and Food Security Ministry said it has also taken into account that the prolonged period of price controls and subsidies is unsustainable for the continuity of the local egg production industry and the country's finances. 'The decision was taken after taking into consideration the industry's commitment to ensure enough supplies and costs which had stabilised,' according to the ministry.
New Straits Times
28-04-2025
- Business
- New Straits Times
Sarawak Oil Palms' output recovery to sustain earnings
KUALA LUMPUR: Sarawak Oil Palms Bhd is expected to deliver a consistent earnings track record as output continues to improve, said RHB Research. However, the research house noted that the earnings may be offset by moderating crude palm oil (CPO) prices. Sarawak Oil recorded CPO average selling price (ASP) of RM4,688 in the first quarter (Q1) 2025, while palm kernel prices shot up by a larger 14 per cent quarter on quarter (QoQ) to RM4,105. This is higher than the average Malaysian Palm Oil Board (MPOB) price, which represents a 13 per cent premium. "Consequently, Sarawak Oil's profit before tax margin rose to 11 per cent during the quarter versus 8.5 per cent in Q1 2024. "We note that the company does not engage in forward sales and we keep our financial year (FY25) CPO price assumption of RM4,300 per tonne," the firm said. Sarawak Oil's Q1 2025 core profit fell 26 per cent QoQ to RM120.8 million, largely in line with RHB Research's and street estimates, at 24 per cent and 27 per cent of full-year forecasts. It said the decline was mainly due to the drop in fresh fruit bunches output as well as lower CPO ASPs. "We note that Sarawak Oil is now in the midst of securing first half 2025 fertiliser requirements at prices that are flattish year on year (YoY). "We keep our unit cost assumptions unchanged, for now, as we expect output recovery in the coming quarters, which should bring down unit costs accordingly," it said. Overall, RHB Research noted that there will be no disclosure for Sarawak Oil's downstream, but the firm is of the view the segment will face challenges, no thanks to the current volatility in the market. While Malaysia's palm oil may appear attractive compared to Indonesia's due to lower US tariffs, the firm said this advantage may not be straightforward. It noted that Indonesia's more advantageous tax structure at 17.9 per cent compared with Malaysia's 10 per cent, assuming the recent proposal to revise export tax, could offset the benefit. "As such, we remain cautious on the segment's performance and keep our conservative estimates for the utilisation rate of 75 per cent and margin assumptions of three per cent. "We make no changes to our earnings, as CPO prices continue to moderate. We maintain 'buy' and RM4.80 target price on the stock," it added.
