KUALA LUMPUR (March 17): CCK Consolidated Holdings Bhd (KL:CCK) has strong growth potential from Indonesia, and minimum wage increases will help boost its retail operations, said Public Investment Bank.

The Sarawak-based poultry firm is in the midst of building a new plant in Boyolali, Indonesia which is projected to triple its current production capacity to about 60,000 tonnes per year, said the research house, one of only two covering the stock.

“The strategic location of this new plant, closer to key raw material sources, is expected to generate significant cost savings,” Public Investment Bank said, noting significant contribution to earnings beginning 2027.

The research house also maintained the stock on ‘outperform’ call and its target price at RM1.79 following its recent visit to the company.

Shares of CCK Consolidated have declined more than 22% since the start of 2025 following weaker-than-expected quarterly results. Apex Securities, the other research house covering CCK Consolidated, has the stock on ‘buy’ in February following the sharp fall in share price.

Apart from poultry, the company also operates a chain of stores in East Malaysia selling both fresh and frozen food as well as processed food such as burger patties and frankfurters. Its Indonesian operations, which provided about 20% to its revenue, is backed by private equity firm Creador.

Both Malaysia and Indonesia have raised their minimum wage in 2025, which will increase labour cost, though “we understand that the impact [is] minimal, as wage adjustments are expected to drive an increase in consumer spending and overall consumption”, Public Investment Bank said.

Further, the company could also raise prices to pass on the higher cost if needed, the research house added.

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