[%LCwv%] 
Research by HLIB
HOLD – TP RM22.86

"Better output growth prospects in FY25”

Key highlights from our recent virtual meeting with KLK’s management include (i) expect better FFB output growth in FY25, (ii) unit CPO production cost to trend down further in 4QFY24 on the back of seasonally higher production volume, (iii) on track to achieve replanting target of 10,000 ha in FY24, (iv) more optimistic undertone on manufacturing segment’s prospects, and (v) KLK is in the midst of getting itself ready for EUDR implementation. We trim our FY24-26 core net profit forecasts by -2.5%/-1.6%/-1.4%, mainly to account for slightly lower FFB output assumption. Post earnings revision, we maintain our BUY rating on KLK, with a lower sum-of-parts derived TP of RM22.86.

Analyst:  
Chye Wen Fei
[%YzQF%]

$KLSE-KLK 
Research by HLIB
HOLD – TP RM22.86

"Better output growth prospects in FY25”

Key highlights from our recent virtual meeting with KLK’s management include (i) expect better FFB output growth in FY25, (ii) unit CPO production cost to trend down further in 4QFY24 on the back of seasonally higher production volume, (iii) on track to achieve replanting target of 10,000 ha in FY24, (iv) more optimistic undertone on manufacturing segment’s prospects, and (v) KLK is in the midst of getting itself ready for EUDR implementation. We trim our FY24-26 core net profit forecasts by -2.5%/-1.6%/-1.4%, mainly to account for slightly lower FFB output assumption. Post earnings revision, we maintain our BUY rating on KLK, with a lower sum-of-parts derived TP of RM22.86.

Analyst:  
Chye Wen Fei
wfchye@hlib.hongleong.com.my