HLIB Maintains 2026 CPO Price Projection At RM4,200 Per Tonne

KUALA LUMPUR, Feb 5 (Bernama) -- Hong Leong Investment Bank Bhd (HLIB) is maintaining its crude palm oil (CPO) price assumption of RM4,200 per metric tonne (mt) and earnings forecasts for 2026 for now, pending a review following Indonesia’s recent move to delay the implementation of its B50 mandate.

HLIB said the results for the fourth quarter of financial year 2025 are expected to be broadly in line with expectations despite weaker year-on-year upstream performance.

“Quarter on quarter (q-o-q) earnings will likely be mixed, reflecting uneven fresh fruit bunches (FFB) output trends. Downstream remains challenging, in our view,” it said in a note today.

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It highlighted that despite a seasonally lower cropping pattern, four out of seven planters under its coverage (Genting Plantation Bhd, Hap Seng Plantation Holdings (HSP), IOI Corporation Bhd and Kuala Lumpur Kepong Bhd) recorded positive q-o-q growth in FFB output.

“We attribute this mainly to cropping pattern shifts in parts of Malaysian estates. As a result, we expect planters to report mixed q-o-q earnings in the upcoming results season,” said HLIB.

Downstream performance, however, will likely remain subdued due to the export tax and levy differential between Malaysia and Indonesia, persistent overcapacity in Indonesia, and high palm kernel prices which remained high until the end of October 2025, it added.

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On another note, HLIB said the higher restocking activities ahead of major festivals, coupled with seasonally lower output, lifted CPO prices by four per cent to RM4,134/mt since early January 26, bringing the year-to-date average to RM4,050/mt.

It maintained its overweight stance on the plantation sector, with top picks being SD Guthrie Bhd (target price (TP): RM6.49) and HSP (TP: RM2.57).

-- BERNAMA