KUALA LUMPUR (Nov 30): PPB Group Bhd’s share price jumped as much as 6.7% to an intraday high of RM17.30 per share on Wednesday (Nov 30) after the release of its third quarter ended Sept 30, 2022 (3QFY2022) results, which beat analysts’ expectations.
The stock was ranked the third largest gainer among all Bursa Malaysia's securities at market close even as it pared earlier gains. At 5pm, the counter closed at RM17.20, up 98 sen or 6% from the previous day’s closing price, with over 3.14 million shares changing hands.
The group’s 3QFY2022 results saw net profit rose 92.38% to RM784.75 million from RM407.91 million a year ago, thanks to improved revenue contribution from all of its key segments including its 18.5%-owned Singapore-listed Wilmar International Ltd.
Contribution from Wilmar expanded to RM733 million in the quarter under review compared with RM432 million a year ago.
MIDF Research, in a note on Wednesday, said PPB’s latest quarterly earnings came in above expectations, and hence, it is revising its earnings forecast upwards by 56% for FY2022 and 62% for FY2023 by factoring in solid earnings contribution from Wilmar.
“We opine consumer products and film exhibition segment to improve further in line with recovery in economic activity next year,” said MIDF, which maintains a “buy” rating with a higher target price of RM24.10 from RM22.
MIDF also expects continued consolidation in wheat prices, which dropped to US$756.98 (RM3,366.67) per bushel in November, down 40% from their peak of US$1,273 per bushel in May.
“As a result, we anticipate that grains and agribusiness crushing margins will normalise, aided by prudent procurement of feedstock as well a decline in the price of wheat soybean meal price amid upside reward from the strengthening ringgit,” it said.
Meanwhile, Kenanga Research said although earnings from Wilmar are expected to ease on lower palm oil prices, the impact is likely to be cushioned by continual recovery from PPB’s other operations.
“A more sustained recovery is expected from the cinema division which added nearly 40% more screens in May 2022 after taking over MBO with another 9% more screens due, mostly in 4QFY2022.
“Likewise, the mall business under the property division is set to enjoy better footfall especially when its new Megah Rise mall opens next month. Consumer products recovered faster than expected and the momentum should continue,” said Kenanga, which upgraded its rating to “outperform” from “market perform” with a higher target price of RM18.60 from RM17.