RHB Research and HLIB have maintained their BUY calls on Leong Hup International Bhd, with RHB retaining its RM1.07 target price and HLIB raising its target to RM0.99 from RM0.97, as stronger Malaysian operations and improving poultry industry fundamentals support the outlook.
RHB Research analyst said 1H26 net profit rose 13% year-on-year to RM217 million, accounting for 46% to 48% of its full-year forecasts. HLIB analyst Chye Wen Fei said core earnings increased 13% to RM218 million, matching HLIB’s expectations.
RHB said revenue grew 3% to RM4.5 billion, supported by higher average selling prices and volumes for broiler day-old chicks, eggs and broiler chickens in Malaysia and Indonesia. EBITDA margin remained steady at 11.9%, with Malaysia’s stronger contribution offsetting weakness in the Philippines.
For 2Q26, core profit fell 12% quarter-on-quarter to RM102 million at RHB’s calculation, as weaker prices and sales volumes weighed on Indonesia and other overseas markets. HLIB similarly reported a 13.3% sequential decline to RM101.2 million.
Still, RHB expects the group’s scale and integrated business model to help it navigate potential cost inflation and supply chain disruptions arising from geopolitical tensions.
The research house said industry fundamentals have improved as the pandemic and commodity supercycle have phased out smaller and weaker players, driving consolidation that could benefit established operators such as Leong Hup.
RHB also noted net gearing had fallen to 0.47 times from 1.1 times in FY22, strengthening its ability to expand capacity and capture market share.
HLIB said resilient domestic demand and improving regional trade flows should support earnings despite external headwinds and input cost pressures.
The stock price dropped 2% to RM0.77 as of 11.31 am.
