KUALA LUMPUR: Shares of United Malacca Bhd
rose in early trade Friday after it reported third-quarter results that beat expectations.
The plantation group gained 1.76%, or nine sen, to RM5.19, marking a 3.8% increase year-to-date.
In the second quarter ended Oct 31, 2024 (2Q25), the company’s net profit more than doubled to RM30.9mil compared with earnings of RM13.7mil posted in the same period last year.
Revenue for the quarter rose 26.9% to RM183.4mil versus RM144.5mil posted a year ago.
For the first half (1HFY25), its net profit surged to RM44.2mil, driven by a 23.8% increase in revenue to RM347.3mil.
Kenanga Research said United Malacca’s 1HFY25 results beat expectations as 2QFY25 core net profit (CNP) rose strongly for yet another quarter from better harvest, firmer crude palm oil (CPO) prices and easier costs.
“1HFY25 CNP came in at 62% of Kenanga’s and 68% of consensus full-year estimates or 7−17% above ours and market forecasts respectively,” it said.
The research house 2HFY25 earnings are expected to remain positive as robust palm oil prices tempers rising minimum wages in the quarters ahead,” it said.
Kenanga has raised its FY25 CNP by 7% to RM81.9mil, driven by the strong 1HFY25 performance and a firm CPO price outlook, while keeping the target price at RM6.30 and maintaining its "outperform" rating.
Meanwhile, TA Securities said United Malacca 2Q25 results exceeded expectations. Excluding exceptional items, core net profit surged by 72.0% year-on-year to RM27.8mil, driven by a 26.9% increase in revenue.
“We have revised our FY25 and FY26 earnings projections upward by 24.2% and 5.0%, respectively, factoring in the better-than-expected 2QFY25 results, stronger FFB production growth, and improved margins. Additionally, we are introducing our FY27 earnings forecast of RM70.8mil,” it said.
TA has adjusted the target price for United Malacca higher to RM6.04 per share (previously RM5.59 per share), based on a 16x CY25 EPS and a 3% ESG premium. With a potential upside of more than 12%, TA has upgraded UMCCA to a "buy" from "hold."
