RHB Research sees exciting near-term earnings prospects for Leong Hup International
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00:00 In focus this Tuesday morning is Leonghab International.
00:05 RHB Research keeping its buy recommendation on the stock,
00:09 with a higher target price of 72 cent up from 63 cent previously.
00:14 The counter ended trading yesterday at 60.5 cent.
00:17 According to RHB, the poultry, eggs and livestock feed producers' near-term earnings outlook
00:23 looks bullish in view of the improving market conditions in Indonesia
00:27 and robust performance of its anchor operations in Malaysia.
00:31 It says the Budget 2024 announcement to remove the price cap for poultry products
00:36 should not cause prices to spike significantly amid easing commodities prices
00:41 and more stable supply-demand industry dynamics, so demand should stay resilient.
00:46 The third quarter of the year is set to see more explosive growth,
00:50 as it books a strong recovery in average selling prices in Indonesia.
00:54 In Malaysia, operations should also see more solid numbers
00:58 in view of the stable demand and easing feed costs.
01:01 Meanwhile, RHB believes industry consolidation could have been accelerated by the pandemic
01:07 and hyper-commodity inflation, facilitating market share gains for major players like Leonghab.
01:13 Plus, it foresees the company capturing the growing demand for poultry products in the ASEAN markets,
01:18 with its continuous capacity expansion.
01:21 So what does the Streat say?
01:23 According to Bloomberg data, there are five buyer recommendations on the stock.
01:27 With a sole hold call by MIDF Amanah Investment Bank,
01:31 average target price 67 cent,
01:34 Leonghab ended trading yesterday at 60.5 cent,
01:37 so that's a potential upside of almost 11 percent.
01:40 (Music)