Guan Chong Berhad

$GCB / 5102 (GUAN CHONG BERHAD)
Research Report by RHB

$GCB / 5102 (GUAN CHONG BERHAD)
Research Report by RHB

Guan Chong Bhd will likely see a boost in its earnings next year if its proposed acquisition of a 25% stake in a cocoa processing, manufacturing and distribution company in Ivory Coast is finalised.

$GCB / 5102 (GUAN CHONG BERHAD)
Research by RHB

KUALA LUMPUR: Guan Chong Bhd’s purchase of a 25 per cent stake in Transcao Coté d’Ivoire (CI) could provide the company with swift access to increased capacity at minimal capital expenditure, aiding in securing a stable bean supply to tap into the current market.

© New Straits Times Press (M) Bhd

KUALA LUMPUR: Guan Chong Bhd's shares rose in early trade Tuesday after the company announced plans to acquire a 25% stake in Transcao Côte d'Ivoire, a cocoa processing firm based in Ivory Coast.

KUALA LUMPUR: Stocks to watch on Thursday include Kumpulan Kitacon Bhd, Tropicana Corp Bhd, LBS Bina Group Bhd, Key Asic Bhd, Guan Chong Bhd and Skyworld Development Bhd.

Guan Chong Bhd is aiming to expand its footprint into Ivory Coast with a 25% stake in Transcao Côte d’Ivoire (Transcao CI), a cocoa processing company.

KUALA LUMPUR: Guan Chong Bhd's subsidiary GCB Cocoa Singapore Pte Ltd has inked a memorandum of understanding (MoU) with Conseil Du Cafe-Cacao (CCC) and its subsidiary, Transcao Negoce, to acquire a 25% stake in Cocoa processer and distributor Transcao Côte d'Ivoire.

RHB TOP PICKS Q4 2024

$MPI / 3867 (MALAYSIAN PACIFIC INDUSTRIES BERHAD) $DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) $GCB / 5102 (GUAN CHONG BERHAD) $FOCUS / 0116 (FOCUS DYNAMICS GROUP BERHAD) $SIMEPROP / 5288 (SIME DARBY PROPERTY BERHAD)

$GCB / 5102 (GUAN CHONG BERHAD)
Research by RHB
Buy - TP RM5.10

"Selling Overdone, Time To Accumulate; BUY"

BUY and MYR5.10 TP, 77% upside with c.3% yield. The sharp selldown on Guan Chong is overdone. We reiterate our BUY thesis, and try to shed some light on investors’ doubts that may have dampened its share price performance. GUAN has delivered robust YoY earnings growth (+3x) in 1H24 (which exceeded FY23 YoY growth), and is set to book record earnings this year. Management has guided for a higher combined ratio into 2H24, and an even better ratio into 1H25 (~50% forward sales covered), underpinned by robust demand and the shortage of beans and grinding on offer.

Analyst:
Lee Meng Horng
lee.meng.horng@rhbgroup.com

$GCB / 5102 (GUAN CHONG BERHAD)
Research by RHB
Buy – TP RM 5.10

"Sustaining Its YoY Growth Trajectory; Stay BUY”

Keep BUY and MYR5.10 TP, 52% upside and c.2% yield. Guan Chong delivered a robust YoY earnings growth (+3x) in 1H24 and has already surpassed FY23 figures, thanks to higher revenue and margins coupled with favourable hedging positions. We remain upbeat on GUAN’s outlook and earnings potential during the current favourable market, underpinned by historic high ratios and the benefits of a seller’s market. The ongoing expansions at its Ivory Coast plant and the growth of its industrial chocolate in UK would be the key medium-term growth catalysts.

Analyst:
Lee Meng Horng
lee.meng.horng@rhbgroup.com

$GCB / 5102 (GUAN CHONG BERHAD)
Research by RHB
BUY – TP RM5.10

" On Track For a Record-Breaking Year; Keep BUY”

2Q24F earnings should continue showing resilience, with a record-breaking year expected, backed by uptrending ASP, higher revenue and favourable hedging positions. We remain sanguine on Guan Chong’s outlook and earnings potential during this super cycle, bolstered by historic high ratios amid sustained cocoa demand, coupled with limited grinding and bean-on-offer. In our view, its Ivory Coast and UK capacity expansion would be the medium-term catalyst.

Analyst:
Lee Meng Horng
lee.meng.horng@rhbgroup.com

Robust cocoa demand will continue to drive Guan Chong Bhd’s financial performance through the remaining quarters of its financial year ending Dec 31, 2024.

$GCB / 5102 (GUAN CHONG BERHAD)
Research by RHB
Buy – TP RM5.10

“The Cocoa Rush; Keep BUY"

Stay BUY, new MYR5.10 TP from MYR4.70, 17% upside with c.2% yield. Guan Chong’s stellar 1Q24 earnings (+2.9x YoY) is in line with its sanguine earnings growth outlook for 2H24 – due to newfound pricing power, as highlighted in its positive post-results briefing session. We remain bullish and see upside risks to our estimates during this super-cycle, bolstered by the historic high combined ratio on sustained cocoa demand coupled with limited grinding and bean-on-offer. Medium-term catalysts include production growth in both its Ivory Coast (tax-free) and UK plants.

Analyst:
Lee Meng Horng
lee.meng.horng@rhbgroup.com

$GCB / 5102 (GUAN CHONG BERHAD)
Research by RHB
Buy – TP of MYR 4.70

“The Beginning Of a Super Cycle; Reiterate BUY”

Stay BUY, with new MYR4.70 TP from MYR3.30, 22% upside and 2% yield. Historic high earnings of MYR92m (+2.9x YoY, +5x QoQ) achieved in 1Q24 was a beat, thanks the higher-than-expected margin from ASP upticks and favourable hedging position. We believe this is the beginning of a super cycle where earnings are set to quantum leap (underestimated by the market), bolstered by the new found pricing power and margins, based on the trend of elevated combined ratio and sustained cocoa demand.

Analyst(s):
Lee Meng Horng
lee.meng.horng@rhbgroup.com

$GCB / 5102 (GUAN CHONG BERHAD)

KUALA LUMPUR: Guan Chong Bhd posted a record-breaking net profit of RM92mil in the first quarter ended March 31 (1Q24), more than tripled from RM23.8mil in the previous corresponding quarter.

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

General Meetings: Outcome of Meeting

Changes in Director's Interest (Section 219 of CA 2016) - MR TAY HOW SIK @ TAY HOW SICK

Changes in Director's Interest (Section 219 of CA 2016) - MR TAY HOW SIK @ TAY HOW SICK

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Intention to Deal During Closed Period

Circular to Shareholders in relation to the proposed renewal of Shareholders' mandate for recurrent related party transactions of a revenue or trading nature; and Statement to Shareholders in relation to the proposed renewal of authority for the company to purchase its own ordinary shares.

Annual Report & CG Report - 2023

General Meetings: Notice of Meeting

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - MR HIA CHENG

Changes in Director's Interest (Section 219 of CA 2016) - MR HIA CHENG

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - MR HIA CHENG

Changes in Director's Interest (Section 219 of CA 2016) - MR HIA CHENG