PETALING JAYA: QL Resources Bhd

’s outlook is expected to remain resilient for the financial year 2026 (FY26), say analysts.

This will be well supported by improved project margins in the palm oil and clean energy (POCE) segment, sustained performance of surimi-based products and continued resilience in the convenience store (CVS) segment.

Some of the key takeaways from the group’s analyst briefing recently include headwinds that will persist for its marine product manufacturing (MPM) segment and the POCE segment being positioned for continued growth recovery in average store sales in the first quarter of financial year 2026 (1Q26).

QL Resources’ margins were also expected to normalise for the integrated livestock (ILF) segment in FY26.

TA Research, which has a “hold” call on the stock with a target price of RM4.74 per share, said: “Looking ahead, we remain positive on the POCE segment’s growth trajectory, underpinned by an increase in projects secured post-acquisition of Plus Xnergy and strong policy tailwinds from Malaysia’s National Energy Transition Roadmap.”

Notably, BM Greentech Bhd

, a subsidiary of QL Green Resources, contributed 76.5% or RM73.6mil to segmental pre-tax profit, said TA Research.

As for the group’s CVS segment, the research house expects average store sales to improve moving into 1Q26, aided by the disbursement of Sumbangan Tunai Rahmah.

As of 4Q25, the group operated 445 FamilyMart stores and 152 FM Mini (net additions of 50 each), with 231 FamilyMart stores certified halal.

TA Research said: “Looking ahead, the group remains on track to achieve its FY27 target of 700 outlets, while intensifying efforts to enhance store-level productivity.”

On the group’s ILF segment, which was the key earnings contributor in FY25, the research house noted the full removal of egg subsidies is scheduled for August 2025.

“Hence, we expect margins to normalise in FY26 due to the absence of government support, despite sustained demand,” it said.

Going forward, to enhance margins, the group will focus on expanding market penetration for its branded egg products, which generally yield higher margins. Notably, branded eggs currently account for 20% of total eggs sold.

Maybank Investment Bank Research (Maybank IB) in its report said it has maintained a “hold” on QL Resources with an unchanged target price of RM4.25 per share.

Amid the short-term headwinds, the brokerage firm said the group’s MPM outlook remains steady with resilient demand, and plant utilisation increases to drive growth in FY26.

That said, with the eventual removal of egg subsidies (on Aug 1, 2025), the potential contraction in ILF margins may hinder meaningful group earnings growth potential in the short-term.

Post-subsidy removal, Maybank IB believes that grade C egg average selling prices may increase by about three sen to four sen per egg – short of the 10 sen per egg subsidy amount, due to a relatively balanced egg industry supply at present.

That said, the group is planning to grow its higher margin “branded” egg sales in order to cushion the negative margin impact on ILF in the near-term. “We understand that circa 20% of egg sales are in the ‘branded’ category, which were not subjected to price controls,” it added.

Meanwhile, the group’s plan to divest in the palm oil business is still underway. In terms of its palm oil business, QL Resources still owns around 400 acres of oil palm land and one crude palm oil mill in Tawau, Sabah.

“Given that management has already found a suitable buyer for its palm oil land, we believe that its palm oil business divestment could be fully completed by end-FY26,” said Maybank IB.

Some risk factors for QL Resources include larger-than-expected impact of the weaker ringgit on feed costs and prolonged weak farm product prices on unfavourable supply-demand situations may impact earnings.

Higher-than-expected operating expenses may also adversely impact earnings while departure of key management is another risk factor.