Ta Ann may post 4QFY25 earnings surprise, dividend upside in focus

KUCHING (Jan 30): Ta Ann Holdings Bhd (Ta Ann) could deliver an earnings surprise for the fourth quarter ended Dec 31, 2025 (4QFY25), supported by strong fresh fruit bunch (FFB) and log production, according to Public Investment Bank Bhd (PublicInvest Research).

PublicInvest Research noted that its FFB production rose 27 per cent year-on-year (y-o-y) in 4QFY25 to about 220,000 metric tonnes (mt), the highest quarterly level since 3QFY20 in the absence of weather abnormality.

This lifted full-year FFB output to 666,005 mt, up 3 per cent from a year earlier. On a quarter-on-quarter (q-o-q basis, 4QFY25 FFB production increased 21 per cent.

Log production also staged a strong recovery, surging 40 per cent y-o-y in the final quarter to 64,702 cubic metres.

The research house noted that Ta Ann’s 29.4 per cent-owned associate, Sarawak Plantation, also recorded similarly strong production growth.

“In view of the strong production numbers and low, we may not rule out the possibility of earnings surprise in the final quarter, bolstered by a strong pick-up in FFB production and lower production costs, coupled with improving earnings contribution from owned Sarawak Plantation,” it said.

Similarly, management is also targeting double-digit FFB production growth in FY26F, underpinned by a normalised FFB yield of above 17mt per hectare and favourable weather conditions in Sarawak.

The research house also flagged potential upside to dividends, citing Ta Ann’s solid balance sheet.

Given its net cash position of RM355 million and operating cash flow exceeding RM230 million per annum, the group could declare an additional 10 to 15 sen dividend for the final quarter, it said.

This would lift full-year dividends per share (DPS) to 40 to 45 sen.

At that level, Ta Ann’s dividend yield is forecast at 7.9 per cent, placing it among the highest-yielding stocks in Malaysia and ahead of the banking and REIT sectors. Based on a full-year DPS of 40 to 45 sen, dividend yield could rise further to around 9 to 10 per cent.

PublicInvest Research also noted Ta Ann’s undemanding valuation, stating that the stock is trading at about six to seven times the price-earnings ratio after adjusting for its net cash position of RM355 million and the market value of its RM275 million stake in Sarawak Plantation.

On a forecast basis, this translates to about nine times earnings for FY25 to FY27F, still below Sarawak Plantation’s valuation of 11–12 times.

All told, the house maintained its “outperform” call on Ta Ann with an unchanged 12-month target price of RM5.64, implying an upside of about 24 per cent from the current share price of RM4.55.