March 1, 2024

Malaysian poultry producer Leong Hup International stock slides 12.6% amid lower fourth-quarter profits

The stock price of Malaysian poultry and egg producer Leong Hup International Bhd experienced a sharp decline of 12.6% to 62.5 sen, with approximately 25 million shares traded, following the company's announcement of a lower fourth-quarter net profit amounting to MYR 81.6 million (US$17.1 million), The Malaysian Reserve reported.

Despite hitting a 52-week high earlier this week at 72.5 sen on February 26, 2024, the company faced challenges as its stock plummeted to an intraday low of 61.5 sen.

In its recent exchange filing, Leong Hup disclosed that its revenue for the fourth quarter ending December 31, 2023 (4Q23) saw a 3.9% increase to MYR 2.4 billion (US$505 million). This growth was attributed to higher average selling prices and sales volumes of broiler chickens, day-old-chicks (DOC) in Indonesia and dressed chickens in the Philippines.

For the fiscal year ending December 31, 2023 (FY23), the company reported a net profit of MYR 301.7 million (US$63.5 million), marking a significant 38% increase from the previous year. This growth was supported by a 5.5% rise in turnover to MYR 9.5 billion US$2.01 billion).

Leong Hup expressed optimism about its performance in the coming year, citing favourable regional economic conditions and the easing of feed input costs. However, the impact of a strong US dollar and weak poultry prices in key operating countries remains a concern.

HLIB Research highlighted that while the easing of feed input costs is a positive factor for poultry players, it may not fully offset the challenges posed by currency fluctuations and fluctuating poultry prices.

-      The Malaysian Reserve