Kuala lumpur: Kenanga Investment Bank Bhd (Kenanga IB) anticipates that SD Guthrie Bhd’s financial year 2025 (FY2025) earnings will remain strong, although there may be a slight easing in performance during the second half of the year.

According to BERNAMA News Agency, Kenanga IB noted that crude palm oil (CPO) prices, which have already eased in the second quarter, are expected to soften further in the second half. However, they should continue to be supported by a tight global edible oil supply in 2025, which is expected to become even more pronounced in 2026 despite a higher production outlook.

The research house indicated that second-half profits are expected to remain healthy due to firm palm oil prices, even with a seasonally stronger harvest. SD Guthrie reported a 22 percent increase in net profit for the second quarter ended June 30, 2025, rising to RM505 million from RM415 million a year earlier. This increase was primarily driven by stronger upstream contributions, which offset weaker downstream earnings. Quarterly revenue also saw an uptick, growing to RM5.17 billion from RM4.97 billion.

Meanwhile, MBSB Investment Bank Bhd has projected that Guthrie Bhd’s earnings for the second half of 2025 may taper off as CPO prices are expected to normalize during the peak production period, following an accumulation in closing stockpiles. Similarly, CIMB Securities Sdn Bhd expects plantation earnings in the second half to be lower compared to the first half, attributing this to softer CPO prices.

Despite these projections, Kenanga IB has maintained a ‘market perform’ rating on SD Guthrie, slightly raising its target price (TP) to RM4.80 from RM4.77. On the other hand, CIMB Securities upgraded the stock to ‘Buy’ from ‘Hold,’ increasing its TP to RM5.15 from RM5.06, while MBSB Investment maintained a ‘Buy’ call with an unchanged TP of RM5.43.