KUALA LUMPUR (Jan 6): SD Guthrie Bhd (KL:SDG) is leaning more heavily on land monetisation to support earnings into 2026, as analysts expect gains from industrial land development to offset softer plantation margins in the near term.

CIMB Securities said that land sales gains are expected to pick up in 2026, supported by eight outstanding land related joint ventures across Johor, Selangor and Negeri Sembilan that are either pending sale or remain at the memorandum of understanding (MOU) stage. 

SD Guthrie has indicated an intention to monetise about 1,000 hectares of land annually, which CIMB said could translate into RM500 million-RM700 million in annual earnings. 

The house noted that if achieved, such land sale gains could lift the group’s full year net profit to around RM2.5 billion, above its projected core net profit of RM1.8 billion-RM1.9 billion.

It added that land sale gains are currently excluded from core earnings forecasts, as the segment remains relatively new for the group.

In a Monday (Jan 5) note, CIMB highlighted SD Guthrie’s latest MOU signed last December with Permodalan Darul Ta’zim to explore the development of a 5,000-acre mixed use industrial park that could generate sizeable land sale gain in Kulai, Johor.

Based on the assumed selling price of RM15 per square foot and a retained 20% stake, CIMB estimated a potential land sale gain of approximately RM1.9 billion.

On the plantation side, the house expects the crude palm oil (CPO) price environment to remain broadly supportive over the medium-term, underpinned by supply side constraints and policy driven demand, which provide massive support for large upstream platters such as SD Guthrie.

“SD Guthrie’s 4Q2025 net profit could be affected by lower average crude palm oil (CPO) prices and lower fresh fruit bunches (FFB) output, although SD Guthrie locked in a higher average selling price for its Malaysian operations," the research firm said.

CIMB maintained its 'buy' call on SD Guthrie with an unchanged target price of RM6.01, citing potential upside from land sale gains and higher dividends.