PETALING JAYA: SD Guthrie Bhd, formerly known as Sime Darby Plantation Bhd
, could see its property segment’s earnings coming onstream from financial year 2026 (FY26) onwards, having diversified into the sector recently.
In the last six months, SD Guthrie has announced three property initiatives: the Kerian Integrated Green Industrial Park, the “techpark@enstek” extension and the memorandum of understanding with AME Elite Consortium Bhd to develop a green industrial park in Kulai.
According to Kenanga Research, SD Guthrie’s cumulative nine-month FY24 results appear to have met consensus’ expectations but were a tad above its expectations despite a weak third quarter.
“After adjusting for a net disposal gain of RM356mil, unrealised foreign exchange gain of RM18mil and net fair value gain of RM2mil, year-to-date core net profit rose 49% year-on-year to RM1.02bil to account for 77% and 73% of Kenanga Research consensus respective full-year estimates,” it said.
“The FY24 to FY25 core net profit forecasts are raised by 6% and 9%, respectively, to reflect firmer upstream performance after fine-tuning the crude palm oil (CPO) price higher by 2% and costs lower by some 2% to 3%,” it added.
Meanwhile, RHB Research noted SD Guthrie’s cumulative year-to-date earnings came in below its expectations.
But it also said the fourth quarter should see healthier earnings on the back of stronger CPO prices and improving downstream margin, while new property development earnings will provide longer term support.
“We like the stock for its diversification strategy – which we believe will start bearing fruit from FY25. Valuation remains reasonable as it trades at some 20.6 times 2025 forward price to earnings ratio, at the mid-end of its peer range of 18 to 22 times,” RHB Research said.
The research house maintained its “buy” call and a sum-of-parts based target price of RM5.75, which has a 17% upside potential and a 2% dividend yield.
