KUALA LUMPUR (Nov 20): Two analysts upgraded their call on TSH Resources Bhd’s (KL:TSH) after its results for the third quarter ended Sept 30, 2025 (3QFY2025) came in stronger than expected, supported by firmer palm product prices and improved margins.
MBSB Research upgraded the stock to 'buy' from 'neutral', with a higher target price (TP) of RM1.48 from RM1.23 previously.
This was after taking into account its new FY2026 earnings per share (EPS) forecast of 12.4 sen, and price-earnings ratio (PER) of 12 times.
"The stock is currently trading at a reasonable 10.4 times FY2025 price-earnings, which we view as undervalued and deserve to be re-rated," said the research firm in a note on Thursday.
MBSB noted that TSH’s 3QFY2025 profit after tax and minority interest (Patami) increased to RM49.8 million, up 50.3% year-on-year, driven by expanded crude palm oil (CPO) and palm kernel (PK) sales volumes.
The better profit more than offset the increase in the Indonesian export levy and duty cost of about RM28.2 million, coupled with maintained operating losses for the others segment.
In a separate note, TA Securities raised its recommendation on the stock to 'hold' from 'sell', with a revised TP of RM1.43 from RM1.30 previously, implying a FY2026 PER of 12 times.
TA Securities raised its FY2025-FY2027 earnings forecasts for TSH by 8.3%-10.3%, factoring in improved margins and lower depreciation expenses.
It noted that management remains cautiously optimistic that CPO prices will stay above RM4,000/tonne in the near term, supported by robust exports and domestic consumption, although rising 4Q production and other external factors could cause some volatilities and disruptions.
"Despite external challenges, management maintains a positive long-term view on the CPO price outlook, striving to expand planted hectarage to further enhance future productivity and shareholder value."
Looking into 2026, TA Securities takes a cautious view on CPO prices, as ample South American soybean supply and US-China trade resumption could increase soybean oil trades, potentially limiting CPO demand.
"Strong biofuel demand could provide some support, but weather and trade policy shifts may affect future price stability," it added.
As of Thursday, the counter has one 'buy', one 'outperform', one 'neutral' and three 'hold' calls from analysts, with TPs ranging from RM1.30 to RM1.55.
At the time of writing on Thursday, the stock was two sen or 1.5% higher at RM1.38, valuing the group at RM1.91 billion.