KUALA LUMPUR: SD Guthrie Bhd is expected to post a flat sequential net profit in the fourth quarter of financial year 2024 (4QFY24), according to CIMB Securities Sdn Bhd.
The firm noted that there could be further gains from land sales if the company successfully monetises its lands.
"SD Guthrie is targeting annual land sale profits of RM500 million to RM700 million, which we have not factored into our core net profit estimates.
"Part of the profits will likely come from its plans to develop some of its estates into industrial parks," it said in a note today.
SD Guthrie has also announced plans to develop three industrial parks, namely the 1,000-acre Kerian Integrated Green Industrial Park in Perak; a HALMAS-certified Managed Industrial Park on 464 acres of prime land in Bukit Pelandok, Negeri Sembilan; and a green industrial park on 641 acres of prime land in SD Guthrie's Kulai estates in Johor.
Overall, CIMB has maintained its "Buy" call on SD Guthrie with a higher target price (TP) of RM5.50.
The firm said key re-rating catalysts are better-than-expected fresh fruit bunch (FFB) yields and a higher land sale gain, while potential downside risks are a sharp drop in the crude palm oil (CPO) price and a shortage of workers.
Meanwhile, CIMB has cut its FY24 forecast net profit forecasts for SD Guthrie by seven percent to reflect lower FFB output from Indonesia and Papua New Guinea, a higher CPO price assumption of RM4,150 per tonne, and a higher effective tax rate.
For the FY26 forecast, the firm has revised its earnings estimates up by three per cent to reflect a higher CPO price of RM4,200 per tonne and an increase in the minimum wage to RM1,700 per month starting Jan 1, 2026.
The revision also considers the recent adjustment of windfall profit levy threshold prices in Malaysia.