GCB 2H26 Outlook - TP RM2.00
RHB research expect a similar strong performance into the coming year,
as management has taken a proactive inventory positioning and an effective
hedging strategy, coupled with healthy combined ratios from the forward
sales back in 2025. Grinding utilisation rate will remain at 80-90% as demand
is set to improve progressively on restocking activities and a potential super
strong El Niño which may further disrupt bean supply – reverting to a market
deficit from the current forecast of a market surplus. FY26 cover ratio is
estimated at c.80%.
• Earnings and TP. Following the 1H26 beat, we raise FY26F-28F earnings by
89%, 7%, and 7% to reflect stronger EBITDA margins, reduced financing
expenses, and a 7 sen DPS for FY26. Our TP is lifted to MYR2 (from MYR1.70)
as we roll forward our valuation base year to FY27, pegged to an unchanged
12x FY26F P/E (c.5-year average). Key risks: Sharp raw material price
fluctuations, weakening demand, and execution and country risks.