KUALA LUMPUR (July 28): Malayan Flour Mills Bhd (KL:MFLOUR) is back on an analyst’ radar after the staple food producer went nearly two years without any coverage.
The stock is set for a 56% surge in the next 12 months on the back of steady earnings growth, according to Hong Leong Investment Bank, which initiated a “buy” call on Malayan Flour Mills with a target price of 93 sen. Investors can also expect a sustainable 6.7% dividend yield, the research house noted.
“We believe the current valuation does not fully reflect improving earnings profile, robust balance sheet and attractive dividend yield, leaving room for re-rating potential,” Hong Leong Investment said.
While off lows, shares of Malayan Flour Mills are now close to where they started in 2026. In February, the company announced a formal dividend policy to distribute at least 30% of annual net profit following a return to the black.
The stock is now trading at 59.5 sen, less than five times its 2026 earnings, sharply lower than the peer average multiple of about 16 times.
Malayan Flour Mills refines over 10,000 metric tonnes of wheat each day in Southeast Asia with plans to expand capacity by a further 25% in Vietnam. The company also has a grains trading business through a 51%-owned joint venture with Toyota Tsusho Corporation.
The poultry business, meanwhile, is carried out through a 51%-owned joint venture with Tyson Foods and processes over 200,000 chickens daily with plans to raise capacity by 40%. Malayan Flour Mills also manufactures feed for aquaculture.
The fully integrated production “allows the group to capture value across multiple stages of the food supply chain, while enhancing procurement efficiency, ensuring product quality and improving supply chain resilience”, Hong Leong Investment said.
The company is expected to report net profit of RM158.6 million this year before growing to RM172 million, according to the research house’s forecasts.
The stock’s last analyst coverage was by AmInvestment Bank, which last reviewed its rating in September 2024.
