Johor Plantations Group Bhd (JPG) has drawn a more cautious stance from analysts after weaker fresh fruit bunch (FFB) output dragged its first-half earnings, with Hong Leong Investment Bank downgrading the stock to HOLD from BUY, while CIMB Securities maintained HOLD. HLIB kept its target price at RM1.78, while CIMB raised its target to RM1.93 from RM1.91.
HLIB Research said JPG’s first-half 2026 core earnings of RM91.4 million fell 36.1% year-on-year and below expectations, mainly due to weaker FFB production. It cut its FY26 and FY27 core earnings forecasts by 15% and 7.7% respectively, although higher crude palm oil (CPO) price assumptions provided some offset.
CIMB Securities said first-half core net profit of RM94 million accounted for only 27% of its full-year forecast, with internal FFB production falling 11.3% to 420,478 tonnes. Higher production costs also weighed, with CPO production costs rising 9.1% to RM2,578 per tonne.
Still, both research houses expect a stronger second half as FFB production recovers, unit costs ease and CPO prices remain firm. CIMB expects second-half earnings to rise 38% over the first half, while JPG has lowered its full-year internal FFB production guidance to slightly above one million tonnes.
The group also expects its RM650 million Integrated Sustainable Palm Oil Complex to begin phased commissioning from the third quarter, although CIMB expects RM8 million to RM10 million in start-up losses this year.
HLIB said recent share price outperformance had run ahead of fundamentals, while CIMB flagged the first-half earnings miss and iSPOC start-up losses as near-term constraints.
As of 10.14 am, the stock price dropped 4.39% to RM1.96.
