United Plantation Bhd - Earnings Beat on Strong Plantation Performance
Thu, 13-Nov-2025 08:33 am
by Steven Chong • Apex Research

Counter

UTDPLT (2089)

Target Price (RM)

23.70

Recommendation

Hold

  • UPL’s 3QFY25 CNP rose 23.6% YoY and 4.9% QoQ to RM239.6m, bringing 9MFY25 CNP to RM669.6m, which exceeded our full-year forecast at 83% of expectations.

  • We have raised our FY25F/26F earnings forecasts by 4%/2%, respectively, reflecting slightly higher CPO output (2.85m mt vs 2.78m mt).

  • Reiterate our HOLD recommendation on UPL with a higher target price of RM23.70 (previously RM22.20), after rolling forward our valuation base to FY26F. The revised TP is derived by applying a 17x P/E multiple to FY26F EPS of RM1.39.

 

Above expectations. 9MFY25 core net profit reached RM669.6m, exceeding our expectations at 83% of the full-year forecast. The outperformance was driven by higher-than-anticipated crop production during the quarter.

 

YoY. 3QFY25 revenue and CNP increased 23.6% YoY and 30.8% YoY respectively, mainly led by the plantation segment benefiting from higher output, improved cost efficiency, along with stronger CPO and PK ASP. Meanwhile, the refinery segment recorded a loss due to lower sales volume and higher feedstock costs.

 

QoQ. Revenue rose 6.1% QoQ, while CNP increased 4.9% QoQ, supported by higher CPO and PK output and reduced manuring costs. Despite a slight decline in CPO selling prices, the higher sales volumes mitigated the impact.

 

Dividend. The Group declared a first interim dividend of 30 sen/share and a special dividend of 14 sen/share, totalling 44 sen/share. We expect UPL to declare 74.6 sen for FY25, implying a dividend yield of 2.8%.

 

Outlook. Palm oil prices have been volatile in recent months due to rising stockpiles, which hit an all-time high of 2.4m mt in October. That said, we believe production likely may have peaked in October and could ease over the next two months amid the monsoon season. Looking ahead to 2026, we remain positive, supported by tighter supply and potential tailwinds from policy measures such as Indonesia’s B50 biodiesel mandate.

 

Earnings Revision. We have raised our FY25F/26F earnings forecasts by 4%/2%, respectively, reflecting slightly higher CPO output (2.85m mt vs 2.78m mt) following the strong 3QFY25 results.

 

Valuation. Reiterate our HOLD recommendation on UPL with a higher target price of RM23.70 (previously RM22.20), after rolling forward our valuation base year to FY26F. The revised TP is derived by applying a 17x P/E multiple to FY26F EPS of RM1.39, with a 0% ESG premium/discount applied, reflecting its three-star ESG rating.

 

Risk. EU export ban and regulations, changing weather patterns affect FFB production, taxation and export ban in Indonesia threatens local CPO demand, shortage of labours and rising operational cost.

Read more details in:

Disclaimer

The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.

Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.

Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 4.111095 4.143895
EUR 4.789157 4.798654
CNY 0.581054 0.581649
HKD 0.528955 0.533187
SGD 3.160793 3.186131