PETALING JAYA: Kim Loong Resources Bhd

expects the fresh fruit bunch (FFB) production for financial year 2026 (FY26) to increase by 5% to 10%, supported by a better age profile of young palms in productive areas and its replanting programme.

According to TA Research, the group plans to replant about 300ha to 500ha in FY26 and projects the average crude palm oil (CPO) price to hover at around RM4,000 per tonne for the year.

“We maintain a cautious view on CPO prices, weighed down by softer export demand from major importing countries and a projected increase in global vegetable oil supply,” the research house said.

It maintained Kim Loong on “hold” with an unchanged target price of RM2.31, based on 15 times 2026 earnings per share.

TA Research said the group’s 1Q26 results were in line with expectations.

The group posted a 13.7% decline in core net profit to RM41.1mil for 1Q26 (excluding exceptional items), despite a 6% increase in revenue to RM411.7mil.

The weaker earnings were mainly attributed to reduced processing margins from its milling operations.

The plantation operations recorded a profit of RM47.3mil in 1Q26, a 35.4% increase from RM34.9mil a year ago, driven by a 15.1% increase in the average FFB selling price and a 3% rise in FFB production.

During the quarter, average CPO selling price rose 11% to RM4,622 per tonne from RM4,180 per tonne a year ago, while the average FFB selling price increased 15% to RM906 per tonne from RM787 per tonne.

The company said the plantation operations did not face problems in selling FFB produce as most of it was supplied to mills within the group.

Meanwhile, the milling operations’ profit fell 43.8% to RM21.8mil from RM38.7mil a year ago, mainly due to lower processing margins, dragged by a reduced oil extraction rate.

The research house pointed out that although the average CPO selling price rose by 10.6% to RM4,622 per tonne, CPO production fell by 5.9% to 71,200 tonnes, while CPO sales dropped by 8.8% to 71,000 tonnes.