RHB Research upgraded TSH Resources to BUY from NEUTRAL with a higher target price of RM1.45 from RM1.30, while HLIB maintained its BUY call and raised its target to RM1.42, as both analysts expect stronger earnings in the second half of 2026.
RHB said TSH’s 2Q26 core earnings of RM51.5 million were broadly in line with expectations, taking first-half earnings to RM71.2 million. The quarter was supported by a 20.6% quarter-on-quarter recovery in fresh fruit bunches (FFB) production, higher crude palm oil sales and stronger contributions from joint ventures.
HLIB similarly viewed the results as within expectations, with 2Q26 core earnings of RM51.2 million rising 2.7 times quarter-on-quarter despite falling 3.5% year-on-year. It expects higher palm product prices and seasonally stronger crop output to support the second half.
RHB expects CPO prices to remain elevated, supported by crude oil prices and sustained demand from Indonesia’s B50 biodiesel mandate. It also noted that TSH’s lack of forward sales leaves the group highly exposed to the current CPO price environment.
Meanwhile, FFB production has begun recovering, although seven-month output remained 4.3% lower year-on-year due to earlier flooding and replanting activities.
RHB said TSH now trades at around 10 times FY26F earnings, at the lower end of its peers’ 10 to 15 times range and around one standard deviation below its five-year historical mean, making the valuation more attractive.
As of 10.52 am, the stock price gained 0.81% to RM1.24.
