KUALA LUMPUR (Sept 17): CCK Consolidated Holdings Bhd (KL:CCK) is no longer a ‘buy’ amid slower-than-expected recovery from a fire incident at one of its plants in Indonesia, said an analyst.
An alternative, smaller plant could only meet half of the demand despite running at full capacity, Tradeview Research said in a note. There will be no production from the Cikupa plant in the remaining months of 2026 or even until June 2027, the research house said as it downgraded CCK to ‘hold’.
Insurance write-backs are likely to come in phases, though the timing and amount remain uncertain while rebuilding remains unknown pending final insurance assessment, Tradeview Research flagged.
A fire broke out at the Cikupa plant in May this year, destroying nearly all of the production area. The plant is operated by its 60%-owned subsidiary PT Adilmart that produces frozen food products such as sausages, nuggets and burger patties.
Apart from the fire, a depreciation in the Indonesian rupiah also singed CCK’s earnings in the second quarter ended June 30, 2026.
Shares of CCK have lost more than 20% since the fire incident and were trading at 90.5 sen on Thursday, valuing the company that also produces poultry and operates convenience stores at RM555 million.
CCK is likely to forgo some orders in the near term as it now dependent solely on the Pontianak facility, Tradeview Research said, noting a drag of up to RM3 million per quarter from the offline plant.
However, a new plant in Boyolali, roughly three times the size of the Cikupa plant, is expected to start operations in the final quarter of 2026 which will more than offset Cikupa's lost capacity, the research house said.
Overall, "we also expect higher operating costs, notably direct labour, to weigh further on earnings," Tradeview Research added and cut its target price for CCK to RM1.00.
The consensus is now split on CCK, with two ‘buy’, two ‘hold’ and no ‘sell’ calls following Tradeview Research’s downgrade. The average target price is RM1.21.