CCK Consolidated Holdings Bhd - Within Expectations
Thu, 26-Feb-2026 08:40 am
by Daryl Hon • Apex Research

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CCK (7035)

Target Price (RM)

1.62

Recommendation

Buy

  • CCK posted a 4QFY25 CNP of RM15.8m (-25.5% YoY, -16.7% QoQ), bringing 12MFY25 CNP to RM67.3m (-19.9% YoY). The results came in within our expectations, meeting 95% of our full-year forecast and 91% of consensus estimates.

  • We expect CCK to deliver steady performance into FY26, supported by its resilient East Malaysia retail network and disciplined expansion strategy.

  • We upgrade our call from HOLD to BUY with a revised TP of RM1.62 (from RM1.14), now based on 13.5x P/E (from 9.5x) FY26F EPS of 12.0 sen, alongside a three-star ESG rating. 

Results within expectations. Excluding fair value gain in short-term investments (-RM0.5m) and other EIs (+RM0.9m), CCK reported a 4QFY25 CNP of RM14.8m (-25.5% YoY, -16.7% QoQ), bringing 12MFY25 CNP to RM67.3m (-19.9% YoY). The results were within our expectations, meeting 95% of our full-year forecast and 91% of consensus estimates.

 

YoY. 3QFY25 CNP declined 25.5% to RM14.8m, primarily due to weaker contributions across all business segments. Poultry operating profit (-2.3%) was broadly stable, while the prawn segment contracted 42.2% amid lower sales volumes to key export markets, namely Japan and Taiwan. The food service segment fell 35.9%, reflecting softer demand from government schools in Sarawak under existing supply contracts. Meanwhile, retail operating profit dropped 35.4% following strategic pricing adjustments aimed at strengthening competitiveness across the Group’s domestic retail network.

 

QoQ. CNP declined 16.7% QoQ as stronger poultry contributions were offset by weaker performance across the prawn, food service and retail segments. Poultry operating profit rose 86.2%, supported by firmer demand alongside effective cost management and pricing strategies that helped preserve margins. However, prawn segment profitability plunged 89.6% due to lower sales volumes in the Indonesian domestic market and key export destinations, including Japan, Taiwan and Hong Kong. Food service profit fell 68.1%, likely reflecting weaker demand during the year-end school holidays, while retail operating profit declined 11.3% despite higher revenue, suggesting margin compression following recent price adjustments within the segment.

 

Outlook. We expect CCK to deliver steady performance into FY26, supported by its resilient East Malaysia retail network and disciplined expansion strategy. The Group’s vertically integrated model positions it well to benefit from improving consumption trends, underpinned by the Sarawak Government’s projected 4.6% GDP growth in 2026 and gradually strengthening household incomes. Meanwhile, the anticipated commissioning of its Central Java food processing facility in 1H 2026 should enhance operational efficiency within its Indonesian operations while opening opportunities to expand regional sales channels.

 

Earnings Revision. With results broadly within expectations, we retain our forecasts and introduce FY27F earnings estimates.

 

Valuation. We upgrade our call from HOLD to BUY with a revised TP of RM1.62 (from RM1.14), now based on 13.5x P/E (from 9.5x) FY26F EPS of 12.0 sen, alongside a three-star ESG rating. Our latest valuation translates to an implied -2SD from the KLCSU given CCK’s relatively smaller market cap, and is justified by the group’s strong balance sheet and defensive retail-centric earnings base.

 

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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