KL Kepong stock outlook supported by record FFB production

KL Kepong's earnings outlook is being supported by stronger plantation production and crude palm oil prices, although cost pressures remain significant. In an analysis dated October 28, 2026, Focus Malaysia reported that Public Investment Bank expects Kuala Lumpur Kepong to deliver a decent fourth quarter for the financial year ended September 2026.

Production provides operational support

KLK's fresh fruit bunch production exceeded six million metric tonnes in 2026, representing 7.9% year-on-year growth. Fourth-quarter production rose 16.4% to 1.6 million tonnes, with management indicating that production peaked in October.

The operating backdrop is also being helped by firmer crude palm oil prices. Public Investment Bank expects these prices to offset part of the pressure from higher input expenses and forecasts core net profit of RM1.29 billion for 2026 and RM1.34 billion for 2027.

Costs and weather remain key risks

Malaysia's minimum wage increase from RM1,700 to RM2,000 per month is expected to affect about 30% of KLK's Malaysian workforce. Fertiliser procurement costs are forecast to rise 15% to 20% year on year, although the group has secured its requirements through February 2027.

Analysts also expect El Nino to weigh on Indonesian palm oil production next year, while the impact on Malaysian output is expected to be more limited. KLK plans to replant 7,000 to 8,000 hectares in 2026 at an average cost of RM33,000 per hectare.

Valuation and strategic considerations

Public Investment Bank retained its Neutral rating and RM23.86 sum-of-the-parts target. The bank also highlighted a possible earnings opportunity from the European Union Deforestation Regulation, scheduled to take effect on December 30, 2026, as certified palm oil could command higher margins.

KLK is targeting full occupancy at Coalfields Retail Park by the first quarter of financial 2027, but the development is expected to take several years to break even. Capital expenditure is budgeted at RM800 million to RM1 billion for 2026 as the group aims to reduce gross gearing from 90% to 50% over five years.

Malaysia's broader equity market remains the relevant backdrop for plantation shares; see current market reports.

Weitere Meldungen und Analysen zu KL Kepong stock are available in the topic overview.