SD Guthrie Raises Target Price to RM7.65 on Strong Earnings and Land Monetisation

SD Guthrie maintains its BUY call as resilient earnings, stronger CPO assumptions and recurring land monetisation support a higher target price.

SD Guthrie Boosts Earnings Outlook

within expectations, with its target price raised to RM7.65 from RM7.00.The plantation group’s 1HFY26 core profit after tax and minority interest (PATAMI), excluding exceptional items of RM88.0 million, reached RM898.0 million.

This represented 50.6% of the research house’s full-year forecast and 61.1% of Street expectations, supported by stronger Indonesia upstream earnings, steady oil extraction rates and gains from land monetisation.

Upstream performance remained mixed during the quarter. Operating profit from Malaysia and Papua New Guinea/Solomon Islands weakened amid higher production costs, particularly fertiliser expenses.

This offset gains from higher realised crude palm oil (CPO) and palm kernel prices, which rose 3.3% and 5.8% year-on-year to RM4,283 and RM3,436 per tonne respectively.Downstream operations provided some relief, with operating profit rising 11.9% year-on-year to RM141.0 million.

The improvement was driven by stronger Asia Pacific bulk margins, which more than offset weaker differentiated operations in Asia Pacific and Europe.

Meanwhile, the industrial development segment recorded a sharp increase in operating profit to RM603.0 million following the disposal of 935 acres in Kulai, Johor, for industrial park development.

The research house raised its FY2026-FY2028 core earnings forecasts by 2.5%, 5.5% and 12.0% respectively, reflecting higher CPO price assumptions of RM4,400-RM4,350 per tonne, modest fresh fruit bunch growth and recurring land disposal gains of at least RM500 million annually.

SD Guthrie also proposed disposing of 556.98 acres in Senai to Sime Darby Property for RM418.51 million. The transaction could reduce net debt and lower net gearing to an estimated 0.34x, strengthening the group’s balance sheet.

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