CAB Cakaran Posts Soft 3Q26 Results on ASP Weakness

Core PATMI for the third quarter of FY26 dropped to RM21.4 million from RM22.7 million a year earlier, missing forecasts as lower average selling prices (ASPs) for broilers, chicks, and feed weighed on the Integrated Poultry segment. Revenue did climb 7.5% YoY to RM611.8 million, but the profit decline signals that top-line growth is masking underlying operational strain.

What CAB Cakaran Does

CAB Cakaran Corporation Berhad is a Malaysian integrated poultry producer and retailer operating across three main segments: Integrated Poultry, Retail, and Fast Food. The group breeds and sells broilers and chicks, manufactures and distributes animal feed, and operates a network of retail outlets and quick-service restaurants.

In 2025, CAB acquired feed manufacturer CAB Feed Sdn Bhd (formerly Cargill’s operation) and Desa CAB Sdn Bhd, consolidating a full vertically integrated supply chain. These acquisitions underpinned the 6.9% YoY revenue growth in the first nine months of FY26, but operational headwinds have offset the top-line benefit.

3QFY26 Earnings: The Numbers Behind the Miss

For the nine-month period ended 30 June 2026, core PATMI stood at RM70.9 million, up just 0.4% YoY compared to RM70.7 million in 9MFY25. This accounts for 62.3% of Malacca Securities’ full-year FY26 forecast of RM113.9 million, and 67.3% of consensus estimates of RM105.4 million.

On a quarter-on-quarter basis, revenue fell 2.3% to RM611.8 million from RM625.9 million in 2QFY26, driven by lower feed sales to contract farmers and a dip in broiler volumes. The Integrated Poultry segment’s operating profit dropped 18.1% YoY to RM36.8 million, squeezed by depressed selling prices across all major product categories.

Meanwhile, Retail operating losses widened 17.8% YoY to RM0.5 million as store traffic contracted amid intensified retail competition. Fast Food losses also widened to RM0.5 million following the shutdown of a poorly performing outlet, indicating that diversification efforts remain a drag on consolidated profitability.

Forecast Cuts and Valuation Reset

Malacca Securities has cut its FY26, FY27, and FY28 core PAT forecasts by 16.4%, 15.7%, and 15.0% respectively, revising them down to RM95.4 million, RM101.6 million, and RM104.3 million from prior estimates. The research house also trimmed its P/E multiple to 5.0x from 5.5x to reflect persistent ASP weakness and delays in the Salim Group Indonesia joint venture.

According to Malacca Securities’ valuation model, the target price of RM0.72 implies a potential upside of 34.6% from the current share price of RM0.535. This is pegged to FY27 forecast earnings per share of 14.47 sen, applying a conservative multiple to account for near-term operational challenges.

The research house maintains a BUY recommendation, betting that internal cost efficiencies from CAB Feed integration and eventual recovery in ASPs will drive re-rating, though the path to margin expansion remains uncertain near-term.

Indonesia JV Delays and Capacity Expansion Risk

Phase 1 of the Salim Group Indonesia JV, earmarked for a USD10 million food processing plant and originally scheduled for commencement in 2Q26, has hit implementation delays and is under timeline review by JV partners. This postponement removes a near-term catalyst for volume growth and market expansion in a key regional market.

The RM105 million Terengganu project (+2.0 million bird capacity) now stands as CAB’s primary long-term growth driver, but it offers limited relief for FY26 and FY27 earnings, which remain hostage to volatile feed raw material costs (corn and soybean meal) and ASP pressure.

What This Means for Retail Investors

CAB Cakaran’s valuation at RM0.535 reflects weak sentiment driven by compressed margins and execution delays on growth initiatives. The 34.6% upside to Malacca Securities’ target price assumes a recovery scenario in which ASPs stabilize, M&A synergies materialize, and the Indonesia partnership moves forward without further delays.

Investors holding or considering the stock should monitor quarterly ASP trends in broilers and feed, progress on the Terengganu capacity ramp, and any updates on Salim JV timelines. Disease outbreaks in the poultry sector, which Malacca Securities flags as a key risk, could trigger sharp downside surprises to earnings.

The spread between current price and target price offers asymmetric risk-reward for longer-term investors with tolerance for execution uncertainty, but near-term cash flow visibility remains limited by current operating margin compression.

Key Takeaways

• CAB Cakaran’s 3QFY26 core PATMI fell 5.9% YoY to RM21.4m, missing expectations due to lower ASPs for broilers, chicks, and feed, plus weaker organic volumes.
• Nine-month FY26 PATMI is virtually flat YoY at RM70.9m, representing only 62.3% of Malacca Securities’ full-year forecast of RM113.9m.
• Integrated Poultry segment operating profit dropped 18.1% YoY; Retail and Fast Food segments both posted wider losses.
• Malacca Securities cut FY26-28 PAT forecasts by 15-16% and reduced its P/E multiple to 5.0x, lowering the target price to RM0.72 from prior levels but maintaining a BUY rating.
• Salim Group Indonesia JV Phase 1 has hit delays; the Terengganu domestic expansion remains the primary growth lever, but provides limited near-term earnings support.

Full Report Availability: The complete Malacca Securities research report on CAB Cakaran Corporation Berhad, titled “CAB Cakaran Corporation Berhad — Below Expectations Dragged by Soft ASPs and Volume Drop,” is available at M+ Online (mplusonline.com). Published 27 August 2026.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Ratings and target prices cited are those of Malacca Securities Research and are subject to change. Always do your own research before making investment decisions.

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