This article first appeared in Capital, The Edge Malaysia Weekly on February 9, 2026 - February 15, 2026

MALAYSIAN poultry players had benefited from the government’s egg subsidy for more than three years from February 2022 before the measure was scrapped last August, following the stabilisation of egg prices. With the removal of subsidies, egg prices are now fully market-driven, determined by supply-and-demand dynamics.

Perak-based poultry firm Hock Soon Capital Bhd (KL:HOCKSOON) remains optimistic about its business outlook, viewing its upcoming listing as a timely move to support expansion plans.

Scheduled to debut on Feb 13, the group is set to become the first Main Market listing of 2026, aiming to raise RM90 million from its initial public offering (IPO).

In an interview with The Edge, executive director Alex Ong Keat Hoe says the group’s growth trajectory is underpinned by plans to nearly double its egg production capacity within the next five years.

“Of course, we do see some impact on the numbers without the egg subsidy. But in terms of general profitability, with our products being eggs, we believe earnings will remain resilient. Doubling our production capacity over the next five years will translate into growth in both revenue and profit,” he says.

Hock Soon received egg subsidies amounting to RM7.25 million, RM20.97 million, RM32.08 million and RM40.12 million over the financial years ending Sept 30, 2022 (FY2022) to FY2025 respectively, representing 50.3%, 61.4%, 78.9% and 95.5% of its net profit for those years.

In FY2025, it posted a slightly higher net profit of RM41.96 million against RM40.74 million in FY2024. After adjusting for government subsidies, however, its net profit came in lower at RM11.47 million compared with RM16.36 million in FY2024.

Hock Soon’s IPO is expected to raise RM60 million from the public issue portion, while the remaining RM30 million will come from an offer for sale of shares, accruing to selling shareholders.

Besides Alex, the selling shareholders include his father and managing director Ong Boon Leng; mother and executive director Lim Suk Gen; and brother and executive director Ong Keat Qian.

Upon listing, the Ong family — via Ong Legacy Sdn Bhd — will retain a 70% stake in Hock Soon, which will have an estimated market capitalisation of RM300 million.

Founded in 1979, Hock Soon traces its roots to the late Ong Kim Hock, father of Boon Leng, and Ong Boon Sing, Boon Leng’s brother.

To support future growth, the group has budgeted RM53.45 million for the development of a new poultry farm in Teluk Intan, Perak, featuring 25 closed-house chicken coops. The new facility, with a total estimated cost of RM90 million, will nearly double the group’s total daily production capacity to 3.16 million eggs from its current 1.63 million eggs. The new farm will complement its existing operation in Bidor, Perak.

Hock Soon is also eyeing growth in overseas sales. Alex says the group is aiming for Singapore to contribute 5% of its revenue once exports commence.

“We expect to receive approval from the Singapore Food Agency by this quarter, as the audit was already conducted last July,” he says, adding that other potential export markets include Timor-Leste, Brunei and Taiwan. Currently, the group’s sole export market is Hong Kong, which accounted for less than 1% of its FY2025 total turnover.

The group’s products are categorised into ordinary eggs — marketed under its house brand “Qplus”, unbranded eggs and eggs sold under customers’ brands — and premium eggs sold under the “Qplus” brand.

“One of our goals is to expand the ‘Qplus’ brand. In Malaysia, however, the mass market is still dominated by unbranded eggs. So, our strategy is to grow in a balanced manner, maintaining focus on unbranded eggs while gradually increasing emphasis on our own brand,” Alex says.

Of the 439.12 million eggs sold in FY2025, 98%, or 430.46 million, were ordinary eggs, with the remainder comprising premium eggs.

Alex adds that an expansion of its existing feed mill in Bidor is expected to commence operation by end-2027 or early 2028 to support the group’s increased production capacity. Equipped with advanced technology, the expanded feed mill is expected to improve efficiency and reduce costs.

A stronger ringgit is another positive factor for Hock Soon, as about 70% of its total purchases in FY2025 comprised raw materials for feed production denominated in the US dollar.

“Savings on feed costs will be very substantial. And we believe the ringgit will continue to strengthen, which is an advantage for us,” he says.

Despite intense competition, Alex believes Hock Soon’s long-term growth prospects remain intact, supported by steady demand and industry consolidation.

“Demand for eggs has always been sustainable in Malaysia. We are among the top 13 countries globally in terms of per capita egg consumption,” he notes.

“What I foresee over the next five to 10 years is industry consolidation. Traditional poultry farmers will gradually be phased out, in line with the government’s focus on modernising farming practices.”

He adds that stronger cost controls — particularly through in-house feed formulation — coupled with egg production rates, will enable Hock Soon to outperform peers.

Nonetheless, TA Securities has labelled Hock Soon as “overvalued”, assigning a lower fair value of 44 sen per share based on a target 2026 price-earnings ratio (PER) of seven times for the poultry industry.

“At the IPO price of 60 sen, Hock Soon’s reported FY2025 EPS (earnings per share) translates into a PER of 7.1 times. After normalising earnings by excluding gains from changes in the fair value of biological assets and removing government subsidies for comparability, the group’s historical three-year average PER exceeds 60 times,” it explains.

Following the removal of subsidies, Hock Soon recorded a three-year core earnings compound annual growth rate (CAGR) of 8.4%, with core earnings reaching RM11.47 million in FY2025. Core net margins remained healthy, ranging from 6.7% to 12.5% over FY2022 to FY2025.

TA Securities expects Hock Soon’s growth trajectory to remain resilient, supported by ongoing capacity expansion, stable demand from existing customers and a growing client base.

Hock Soon’s net gearing remains at below 0.1 times post-listing and utilisation of IPO proceeds.

Though the group does not have a formal dividend policy, TA Securities has forecast dividend yields of 3.1%, 3.3% and 3.5% for FY2026 to FY2028 respectively, in line with management expectations.

Meanwhile, Malacca Securities expects an upside to Hock Soon’s shares post-listing, given its fair value of 66 sen per share, based on a PER of 9.5 times pegged to mid-FY2027 EPS of 6.9 sen.

The research house believes the favourable ringgit strength and the vertically integrated model could translate into stronger margins for the group.

“We project three-year earnings to come in at RM33.2 million, RM35.8 million and RM38.5 million over the next three years. The dip in earnings for FY2026 is mainly due to the substantial reduction in government subsidies starting in FY2026,” it says.

RHB Research says Hock Soon’s superior profit margins will be a key competitive advantage in its market share expansion.

Nonetheless, it says the group’s near-term earnings growth could be limited by investments in market developments and brand building, even though strong efficiency and cost advantages are expected to support its market share gains. More exciting growth is forecast to kick in by FY2028, it adds.

In Malaysia, Hock Soon captured a market share of 2.61% in 2024, based on an annual production volume of 401.82 million eggs. In comparison, Teo Seng Capital Bhd (KL:TEOSENG) — a 54.85%-owned subsidiary of Leong Hup International Bhd (KL:LHI) — had the highest market share of 10.7%, followed by Lay Hong Bhd (KL:LAYHONG) (7.63%) and TPC Plus Bhd (KL:TPC) (2.96%), according to an independent market research by Smith Zander International Sdn Bhd.

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