QL Resources Downgraded to Neutral Amid RM1.3b Expansion for Protein Diversification

QL Resources Berhad (QLG MK) has been downgraded to a NEUTRAL rating from BUY by analysts, with the target price remaining unchanged at RM4.33, derived from a 10-year multi-stage discounted cash flow model using a 7.2% weighted average cost of capital. The revision follows a recent rebound in share prices, despite the company’s ambitious expansion plans. QL announced the development of QL Innofood Park, a RM1.3 billion project over a 10-year horizon aimed at scaling up manufacturing capabilities to meet growing demand for diversified, value-added proteins.The park, spanning 40.47 hectares in Hilir Perak, will diversify beyond QL’s core surimi-based operations into soy-, chicken-, and flour-based products, focusing on halal, convenient, and sustainable foods to bolster Malaysia’s food security. It will feature 13 production facilities integrated with utilities, logistics, and warehousing, incorporating Industry 4.0 technologies and eco-friendly designs from the outset. This initiative is expected to create long-term jobs and skill development opportunities for the local community.Development will proceed in phases, starting with a RM300 million investment in core infrastructure like cold storage and logistics, slated for completion by the second half of 2027.

QL Resources Downgraded

Subsequent phases allocate about RM100 million annually for building individual plants, aligning capacity additions with market demand.The expansion represents a step-change, boosting QL Foods’ annual production from 50,000 tonnes at Hutan Melintang to 180,000 tonnes—a 2.5-fold increase. This will enhance the group’s ability to serve domestic needs and expand exports across a broader protein portfolio. Forecasts remain unchanged pending details on capital expenditure structure and timelines, but the project positions QL for sustained growth in the consumer products sector amid rising protein consumption trends. Source: MBSB Research

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