Hap Seng Plantations may see softer 2Q earnings as output fall — analyst
03/08/2026 (The Edge Malaysia), Kuala Lumpur - Hap Seng Plantations Holdings Bhd (KL:HSPLNT) may report softer earnings in the second quarter as output decline on seasonal weakness offset higher prices, an analyst said.
The palm oil producer is expected to report sequentially weaker net profit of RM33-to-RM40 million largely attributable to Sabah’s seasonal cropping pattern, according to Phillip Capital. Production, however, is expected to recover in the third quarter when harvesting period peaks, the house noted.
Further upside hinges on sustained crude palm oil price and a tightening supply outlook, Phillip Capital flagged and kept its counter-consensus “hold” call.
Shares of Hap Seng Plantations have risen some 18% year to date, tracking the gains in prices of palm oil, as geopolitical conflicts in the Middle East spur demand for biodiesel as a cheaper alternative fuel source to petroleum oil.
The consensus is also bullish on Hap Seng Plantations, with nine “buy”, two “hold” and no “sell” calls.
As a predominantly upstream planter, Hap Seng Plantations remains more exposed to crude palm oil price movements and production fluctuations compared to larger integrated peers, Phillip Capital said, noting 8%-10% earnings impact for every RM100 per tonne movement in crude palm oil prices.
Hap Seng Plantations is well placed to weather the industry volatility while retaining financial flexibility for future expansion, thanks to its strong net cash balance sheet, Phillip Capital highlighted.
“Overall, we view cost management as a key strength, with operational discipline supporting earnings resilience,” Phillip Capital said. However, “we believe its current valuation fairly reflects its fundamentals,” the research house added.