By Ying Xian Wong


PPB Group shares fell early Thursday, after its first-quarter earnings came in below expectations.

The Malaysian diversified conglomerate late Wednesday said its net profit was MYR377.5 million ($81.8 million), compared with MYR303.2 million a year earlier, mainly due to a turnaround for its grains and agribusiness, coupled with film exhibition and distribution segments. But its associate Wilmar International's contribution was 19% lower on year.

Quarterly revenue was 13% higher at MYR1.52 billion.

Shares fell as much as 5.7% and were last at 15.64 ringgit, down 3.8%.

MIDF Research slashed its 2023 to 2025 earnings estimates by 25%, 38% and 48%, respectively, to factor in weaker anticipated earnings by Wilmar.

Given declining wheat prices, PPB's grains and agribusiness's margin compression should be normalized, and this segment may continue to support the company's operating margin, MIDF said in a note.

MIDF cut PPB's target price to MYR19.00 from MYR24.10 but maintained a buy call on the stock.

Kenanga cut the company's 2023 and 2024 core net profit forecasts by 36% and 15%, respectively, to account for lower-than-expected first quarter earnings.

Analyst Teh Kian Yeong was still upbeat on PPB's outlook and reckoned earnings upside in other segments besides Wilmar may persist, supported by a post-Covid-19 recovery.

Kenanga maintained an outperform rating, with an unchanged target price of MYR19.30.


Write to Ying Xian Wong at yingxian.wong@wsj.com


(END) Dow Jones Newswires

05-31-23 2209ET