New Straits Times (12/08/2026) - KUALA LUMPUR: SD Guthrie Bhd is expected to record stronger earnings in the near term, supported by higher fresh fruit bunch (FFB) production, firm crude palm oil (CPO) prices and gains from its land monetisation activities.

CIMB Securities Research analyst Ivy Ng Lee Fang said SD Guthrie was expected to see stronger sequential earnings in the third quarter (Q3) of financial year 2026 (FY26), driven mainly by higher FFB production and CPO prices, partly offset by higher fertiliser costs.

"We raise our FY26 to FY27 earnings forecasts by three per cent/one per cent, respectively, after increasing our Malaysian CPO price assumptions by RM50/tonne to RM4,450/RM4,550 per tonne, respectively, and lifting our industrial development profit forecasts.

"We estimate that every net RM100 per tonne increase in CPO prices would lift net profit by six per cent, while every three per cent decline in FFB yields would reduce net profit by seven per cent," she said in a note.

Ng said SD Guthrie had identified El Niño as an emerging production risk for FY27, particularly in Kalimantan and Papua New Guinea (PNG).

However, she noted that it is too early to gauge the impact.

"Downstream bulk and trading should continue to benefit from volatility, although differentiated margins remain under pressure.

"We project industrial development net profit at RM1.03bn for FY26F, exceeding SD Guthrie's RM500 million to RM700 million recurring net profit target for FY26," she said.

Moving forward, CIMB Securities maintained its "Hold" call on the stock.

Ng said that the stock appeared fairly valued at relatively demanding FY26 and FY27 price-to-earnings ratios of 23 times and 20 times, respectively, excluding industrial profits.

"Key earnings upside could come from stronger-than-expected CPO prices amid tighter supply, although this could be partly offset by weaker FFB yields if El Niño intensifies," she said.

Public Investment Bank (PublicInvest) analyst Chong Hoe Leong raised SD Guthrie's FY26 to FY28 earnings forecasts by between eight per cent and 20 per cent.

"This reflects a higher CPO price assumption of RM4,500 per tonne and an estimated net gain of RM408 million from the recent land sale transaction in Bukit Kerayong, Kuala Selangor," he said.

Separately, Chong said the company has entered into a conditional sale and purchase agreement with Sime Darby Property involving the disposal of freehold land in Kulai, Johor for RM418.5 million, which would rake in a net gain of RM373 million in Q2 FY27.

PublicInvest has maintained an "Outperform" call on the stock with a higher target price of RM7.81.

Read more at https://www.nst.com.my/business/corporate/2026/08/1509342/sd-guthrie-earnings-get-double-boost