KUALA LUMPUR: QL Resources Bhd is expected to post steady revenue growth momentum backed by stronger performance from its convenient store (CVS) segment, according to MIDF Research.
The firm said the company registered positive 12 month financial year 2024 (FY24) performances across all segments with the CVS segment achieving billion-ringgit revenue.
QL Resources reported FY24 core profit after tax and non-controlling interests of RM437.9 million, in line with its projections (102.3 per cent) and consensus' estimates (101.5 per cent).
"Cumulatively, the company's revenue grew 6.6 per cent year on year (yoy) to RM6.7 billion in the financial year 2024 (FY24).
"This was mainly driven by higher average store sales and more stores under the CVS segment (25.7 per cent yoy), as well as greater clean energy projects under the POCE segment (12.5 per cent yoy)," it said in a note.
MIDF Research revised its FY25 to FY26 earnings forecast higher by 13.2 per cent and 16.1 per cent respectively and introduced the FY27 projection.
This reflects expectations of higher CVS store counts and average sales, higher clean energy projects with high margins, higher marine products manufacturing (MPM) revenue from a new plant at PT Hasil Laut, and lower finance costs due to borrowings repayment and a favourable interest rate outlook.
Meanwhile, MIDF Research expect more clean energy projects from BM Greentech under the palm oil and clean energy (POCE) segment, aligned with government renewable energy initiatives and global energy transitions.
"The MPM and integrated livestock farming segments are expected to remain strong underpinned by sustained demand for poultry products and soaring demand for seafood products.
"Hence, we upgrade QL Resources to Buy from Neutral with a higher target price of RM7.25 from RM6.50, previously," it added.