“As for sector earnings, we expect a q-o-q decline in 1QFY2023, on the back of lower CPO average selling prices (ASPs) and lower production in the off-peak season,” they add.
RHB Group Research analysts Hoe Lee Leng and Syahril Hanafiah have maintained “neutral” on the plantation sector, continuing to advocate integrated players such as Wilmar International (SGX:F34
) and Golden Agri-Resources (SGX:E5H) as they perform better in a lower crude palm oil (CPO) environment.
Hoe and Syahril note that Malaysia’s palm oil inventory dropped 6.6% m-o-m in February due to the low output season coupled with floods experienced in key states. They expect palm oil stock levels to continue declining in March as a result of low production as well as rising festive demand.
