May 13, 2026
 

Malaysia's integrated poultry producer has sufficient feed raw materials secured through FY26, though spot feed prices have risen sharply since the Iran conflict escalated.

CAB Cakaran Corp Bhd has indicated that rising input costs from global supply chain disruptions remain manageable, with feed raw materials secured through its financial year ending 30 September 2026, according to a research note by TA Research.

Feed constitutes approximately 65% to 70% of CAB Cakaran's total production costs. The company's exposure to global feed price movements has increased following its acquisition of Cargill Feed Sdn Bhd in November 2025. Malaysia sources corn and soybean meal primarily from South America, India and Pakistan, with prices rising since February, driven largely by higher freight costs amid ongoing geopolitical tensions.

Spot poultry feed prices have increased to approximately RM2,000 to RM2,500 (US$455 to US$568) per tonne, up from RM1,900 to RM2,100 (US$432 to US$477) per tonne prior to the Iran conflict. Despite the rise, TA Research said it does not expect any material earnings impact over the near term given the company's existing raw material cover.

The research house noted that sales volumes to key accounts are improving, and said a potential uptick in broiler chicken prices could help offset rising operational cost pressures in the second half of FY26.

On the corporate front, CAB Cakaran's retail segment turned profitable in the fourth quarter ended 30 September 2025, following losses reported since FY23, while losses in the fast-food segment narrowed in the first quarter of FY26.

TA Research maintained a buy recommendation on the stock but revised its target price to 82 sen (US$0.19) from RM1.03 (US$0.23), based on four times calendar 2027 earnings per share. The research house said the lower target price-to-earnings ratio reflects geopolitical uncertainty and execution risk, adding that the stock's current 2027 price-to-earnings multiple of 2.6 times remains below its historical three-year mean of four times.

- The Star