SD Guthrie Bhd (SDGU.KL): 2Q26 earnings in line, landbank disposal is being executed as guided

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11 Aug 2026 07:48:08 ET │ 12 pages

SD Guthrie Bhd (SDGU.KL)

2Q26 earnings in line, landbank disposal is being executed as guided

CITI'S TAKE

2Q26 adj NP of RM488 (QoQ: +17%, YoY: -1%) brought 1H26 adj. NP to

RM904m (YoY: -9%). This made up ~45% of full year forecasts, which is in

line, as we expect 2H26 to be stronger HoH due to higher CPO price and

seasonally stronger production months. Declared DPS of 11.18 sen goes ex

on 20 Oct.

Landbank disposals going as planned, RM643m net gain in FY26 so far — SDG

booked RM499m net gain from disposal of 935 acres to its JV with EcoWorld and

PDT in 2Q26. This took total landbank disposals to RM643m net gain for 1H26,

which is in line with their full year guidance of RM500-700m. Subsequent to the

quarter ending, the group have secured two outright disposals of 1,022 acres in

Bukit Kerayong to their JV company and 556 acres in Kulai, Johor (outright sale).

They expect to book ~RM360m and ~RM376m net gain on these disposals

respectively, but is only expected to complete in 2027. This cumulative RM735m net

gain already secured for 2027 is a little above the group’s annual guidance of

between RM500-700m.

Buy

Short-Term View: Upside

Price (11 Aug 26 17:00)

RM6.91

Target price

RM7.60

Expected share price return

10.0%

Expected dividend yield

2.6%

Expected total return

12.6%

Market Cap

RM47,788M

US$11,683M

Gan Huan WenAC

CPO price volatility benefits downstream margins — Downstream EBIT grew

+12%/+33% YoY/QoQ as CPO price volatility benefited the group's trading division.

With prices expected to remain volatile in coming months, we expect downstream

margins to be supported.

1H126 Upstream EBIT fell -18% YoY, but expect rebound in 2H26 — Overall

upstream profitability shrank in 1H26 due to marginally lower realised price (-3%

YoY) and FFB production (-2%). However, we expect upstream earnings to rebound

in 2H from seasonally stronger production months as well as higher CPO price. SDG

shared they have already sold a portion of 3Q26 volumes from their Malaysia estates

at RM4.7k/mt (vs. RM4,5k/mt realised from Malaysia estates in 2Q26).

Implications — We remain positive on SDG, our top pick in the CPO sector. We

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