RHB has reaffirmed its “overweight” rating on the plantation sector, following a robust performance in the first quarter of 2025. The sector experienced significant year-on-year earnings growth, aligning with expectations, and is anticipated to maintain this momentum throughout the year. In Malaysia, palm oil inventory rose to 1.99 million tonnes in May, despite higher exports, due to increased production. Analysts predict that palm oil output will continue to rise as it approaches the peak season, with demand likely to improve given current competitive pricing.
The report identifies Johor Plantations Group, Sarawak Oil Palms, Bumitama Agri, PP London Sumatra Indonesia, and SD Guthrie as top picks within the sector. These companies are expected to benefit from the favourable market conditions and strategic positioning.
The analysis underscores the importance of the plantation sector in the regional economy, particularly in Malaysia and Indonesia, where palm oil production plays a crucial role. The sector’s performance is closely watched by investors, given its impact on trade balances and employment.
Looking ahead, RHB anticipates that the plantation sector will continue to thrive, driven by increasing output and stable demand. This positive outlook suggests that the sector will remain a key area of interest for investors seeking growth opportunities in the region.
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