MBSB Downgrades JPG After 3Q Results as Higher CPO Prices Fail to Offset Cost Pressures
Ng Han Siang (Einod) ·
AI-assisted, reviewed by Ng Han Siang (Einod)
MBSB research team downgraded Johor Plantations Group to “Neutral” from “Buy”, cutting its target price to RM1.86 from RM2.21, implying a 4% upside. It believes the recent share-price rally has outpaced fundamentals, with limited scope for earnings recovery in 4Q26. 3Q26 core net profit fell 8% year-on-year to RM89.7 million, while nine-month core earnings of RM183.7 million missed expectations.
Despite realised crude palm oil prices rising 6.6% year-on-year to RM4,683 per tonne, fresh-fruit-bunch production fell 11.9%. Production costs increased 13.5% to RM2,526 per tonne as lower internal output weakened fixed-cost absorption. Higher estate upkeep and maintenance expenses added further pressure.
Looking ahead, MBSB expects aggressive replanting to constrain internal production through 2027–2028, increasing reliance on externally purchased fruit. This could also dilute certification premiums, limiting JPG’s selling-price advantage. The team cut 2026–2028 earnings forecasts by 18%, 16% and 15%, respectively, projecting core net profit of RM250.3 million, RM274 million and RM269.2 million.
As of 3:41 p.m. on November 13, Johor Plantations Group’s share price fell 0.6% to RM1.79.
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