SLP Resources' strong profitability seen extending into Q3
KUALA LUMPUR: SLP Resources Bhd’s strong profitability is expected to continue into the third quarter of financial year 2026 (FY26), despite challenging demand for plastic packaging products in Malaysia amid persistent domestic competition, Kenanga Research said.
KUALA LUMPUR: Kenanga Research predicts SLP Resources Bhd's strong profitability will persist into the third quarter of financial year 2026 despite tough demand for plastic packaging products in Malaysia. Higher resin prices and lower-cost inventory will bolster absolute profits, while improving global market sentiment could further boost the packaging sector.
The firm forecasts the ringgit at RM3.88 to RM3.95 against the US dollar in 2026, mitigating unfavorable foreign exchange translation compared to FY25. Brent crude oil prices are expected to average $80 per barrel in 2026 and $74 in 2027, but unlikely to reach pre-war levels. SLP Resources has a strong cash position and diverse resin supply sources, ensuring adequate resin procurement.
The company's medical-related components and devices development for international clients, with above-average margins, is another earning catalyst. Japan remains SLP Resources' largest export market, contributing over 40% of its plastic packaging sales. Kenanga Research maintains an Outperform rating on the company with a target price of 90 sen.
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