CCK Consolidated Holdings Bhd - Within Expectations
Thu, 27-Nov-2025 04:45 pm
by Team Coverage • Apex Research

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CCK (7035)

Target Price (RM)

1.14

Recommendation

Hold

  • CCK posted a 3QFY25 CNP of RM17.8m (-23.6% YoY, flat QoQ), bringing 9MFY25 CNP to RM52.5m (-18.2% YoY). The results came in within our expectations but below consensus estimates.

  • Input cost pressures are expected to persist in the near term despite the recent strengthening of the ringgit.

  • Maintain HOLD, with a lower TP of RM1.14 (from RM1.26), now based on 9.5x (from 10.5x) FY26F EPS of 12.0 sen.

Results within expectations. Excluding fair value gain in short-term investments (-RM0.6m) and other EIs (+RM0.9m), CCK reported a 3QFY25 CNP of RM17.8m (-23.6% YoY, flat QoQ), bringing 9MFY25 CNP to RM52.5m (-18.2% YoY). The results were within our expectations, meeting 74% of our full-year forecast but slightly below consensus estimates at 69%. 

 

YoY. 3QFY25 CNP declined 23.6% to RM17.8m, mainly on weaker contributions from the poultry, prawn and retail segments. Poultry operating profit fell 45.5% due to significantly lower government subsidies compared to the same period last year for broilers and table eggs. The prawn segment’s operating profit eased 4.8% despite a 13.5% revenue increase, as a larger share of sales was channelled into the Indonesian market, where margins are typically lower as compared to the other export markets. Meanwhile, retail operating profit dipped 4.6% on softer sales volumes and strategic pricing adjustments to remain competitive across the domestic network.

 

QoQ. CNP was broadly flat QoQ as stronger retail and food service contributions were offset by weaker poultry and prawn performance. Retail operating profit rose 12.4% on matured store contributions and firm demand for in-house processed products in Indonesia, while food service operating profit surged 89.3% on higher volumes supplied to Sarawak government schools. These gains were partially offset by a 28.1% decline in prawn segment profitability due to softer demand in Indonesia, and a 7.6% drop in poultry operating profit as overall demand moderated.

 

Outlook. We maintain a cautious outlook for the remaining quarters of FY25. Cost pressures remain a key challenge, as soybean meal and corn prices continue to be volatile despite the ringgit strengthening to around 4.14 against the USD. Recent subsidy reforms — including the complete removal of egg subsidies effective 1 August 2025 — may weigh on topline performance. Nevertheless, CCK is relatively well-positioned to navigate these adjustments given its predominantly downstream, customer-facing operations, which offer greater pricing flexibility and faster pass-through capabilities.

 

Earnings Revision. Forecasts maintained, as results were within expectations.

 

Valuation. We maintain our HOLD call with a revised TP of RM1.14 (from RM1.26), now based on 9.5x (from 10.5x) FY26F EPS of 12.0 sen, alongside a three-star ESG rating. This implies a c.6% discount to CCK’s 5-year historical mean P/E of 10.1x. The de-rating reflects heightened input-cost volatility, as well as uncertainty surrounding new government initiatives aimed at keeping egg and poultry prices competitive.

 

Risks. Volatility in poultry prices and feed expenses, along with vulnerability to currency fluctuations due to feed costs being denominated in USD, while the company also exports a portion of its goods overseas. 

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