AmBank Downgrades Plantation Sector to Neutral, Favors Upstream Players

AmBank Research has downgraded the plantation sector from Overweight to Neutral, citing challenges for downstream oleochemicals due to slowing demand, Indonesian competition, a weaker Rupiah, Chinese oversupply, and industry excess. The firm prefers upstream-focused planters, downgrading Kuala Lumpur Kepong (KLK) and IOI Corporation to Hold with target prices of RM21.71 and RM4.05, respectively. SD Guthrie remains a Hold at RM4.28. Genting Plantations (RM5.84), Johor Plantations (RM1.67), and TSH Resources (RM1.38) retain Buy ratings, leveraging their upstream strength amid a three-month U.S. tariff pause.

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