PETALING JAYA: Integrated poultry farming and food processing company CAB Cakaran Corporation Bhd’s newly acquired feed business is expected to deliver a meaningful topline uplift following its maiden contribution in the first quarter of financial year 2026 (Q1’26).
Berjaya Research Sdn Bhd said the acquisition is deemed earnings-accretive, driven by reduced internal feed input costs and the expansion of third-party feed sales.
“On margins, we anticipate further improvement, supported by the continued downtrend in feed costs in the near term,“ the research firm said in a note.
Separately, Berjaya Research noted that the group plans to acquire a single-storey detached industrial building annexed to a double-storey office in Kuantan, Pahang, for RM2.8 million by Q2’26.
The firm said the acquisition is expected to generate annual rental savings from the property currently leased and occupied by its subsidiary, Pasaraya Jaya Gading Sdn Bhd, while enhancing cost certainty, both of which should support long-term margin expansion.
On earnings, Berjaya Research said CAB Cakaran’s Q1’26 revenue missed expectations, accounting for only 21.6% of the firm’s previous full-year forecast, while core Patami (profit after tax and minority interests) was broadly within expectations at 24%.
Berjaya Research said the slight earnings shortfall was due to lower-than-expected sales volume from the integrated poultry segment.
Year-on-year revenue rose 4.1% to RM617.8 million in Q1’26, from RM593.6 million in Q1’25.
The key revenue contributor, the integrated poultry segment, expanded by 3.7%, driven by higher sales volume of processed chicken, stronger average selling prices for broilers and day-old chicks, and contribution from the newly acquired animal feed business, which accounted for 3.9% of segmental revenue.
Lower feed costs lifted segmental margins to 10% in Q1’26, from 8.4% in Q1’25, reflecting improved cost efficiency.
Meanwhile, CAB Cakaran’s retail segment revenue grew 9.5% on the back of stronger sales from two newly opened outlets, while the fast-food segment registered a 5.1% increase in revenue.
However, stripping off an unrealised forex gain of RM2.8 million recorded in Q1’26, core Patami declined by 15.1% to RM25 million, from RM29.5 million in Q1’25.
Also, the improved operating profitability from the integrated poultry segment was offset by a higher effective tax rate (29.6% in Q1 FY26 vs 25.2% in Q1’25).
Meanwhile, quarter-on-quarter revenue jumped by 8.4%, with growth across all segments, namely integrated poultry (+8.9%), retail (+2.6%), and fast-food (+3.5%).
Core Patami jumped by 18.6% on higher margins from the integrated poultry segment, partially cushioning the higher effective tax incurred (29.6% in Q1’26 vs. 25.6% in Q4’25).
“We trimmed our FY26/27 revenue forecast by 7.6%/6.4% and earnings forecast by 5.5%/4.4% following a downward revision to our sales volume assumptions.
“We keep our Buy recommendation on CAB Cakaran with a lower target price of RM1, based on a 7.0x target price-to-earnings ratio pegged to our FY26 earnings per share.
“We favour CAB Cakaran for its expansion into downstream business activities, positioning it as a full-fledged integrated food player within the next five years.”
Also, it said, CAB Cakaran is one of the key suppliers to various fast-food brands’ operations within Malaysia.
Key downside risks include delays in the commencement of the Nibong Tebal plant, slow progress in its joint venture with the Salim Group, and termination of the supply contract with existing customers.
