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PETALING JAYA: Johor Plantations Group Bhd (JPG) is positioned to benefit from a tightening crude palm oil (CPO) supply backdrop, with stronger realised prices expected to underpin margins and earnings through financial year 2027, according to Apex Securities Research.
In its initiation note, the research house assigned a 'Buy' recommendation to JPG with a target price of RM2.23. The valuation is anchored to a sector peer average FY27 forward price-to-earnings multiple of 15.1 times, applied to JPG's FY27 forecast core earnings per share of 14.7 sen.
Beyond the upstream tailwind, the brokerage highlighted the growing importance of JPG's downstream strategy. The group's Integrated Sustainable Palm Oil Complex (iSPOC) in Sedili, Johor, is projected to begin contributing a fresh earnings stream from FY27, expanding the group's revenue base beyond fresh fruit bunch processing.
Apex Securities also drew attention to JPG's three-star environmental, social and governance (ESG) rating, which it said provides a supportive backdrop for the investment case as sustainability considerations become increasingly central to palm oil procurement and financing decisions.
The combined view, according to the research note, is that tighter CPO supply, stronger realised prices and the iSPOC contribution together create a favourable setup for JPG's earnings and margins into FY27, with the downstream complex providing a structural growth lever in addition to cyclical price support.
Source: klsescreener.com