Company Coverage
First Resources (FR SP): 1H26: Above Expectations On Volume Growth And Stronger Downstream Margins
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$3.95
S$4.57
+15.6%
S$3.65
Analyst
Analyst
Singapore Research Team
research@uobkh.comHighlights
FR delivered 1H26 core net profit of US$216.2m (+42.2% yoy), above expectations at 56%/55% of our/consensus previous full-year forecasts respectively. 2Q26 core net profit of US$119.6m was up 23.8% qoq on higher palm product prices and 38.9% yoy on higher sales volume.
Sales volume ran ahead of production on a net inventory drawdown of 39,000 tonnes (1H25: 75,000-tonne build-up). FFB output grew 10.2% yoy and CPO production rose 18.4% yoy on a full six-month contribution from PT Austindo Nusantara Jaya (ANJ) against two months in 1H25, while refinery EBITDA nearly doubled to US$62.8m.
We lift 2026-28 net profit forecasts by 7-13%. Maintain BUY with a higher target price of S$4.57 (from S$3.65), based on 14x 2027F PE.
Analysis
Above expectations. First Resources’ (FR) revenue rose 44.5% yoy to US$973.6m, EBITDA increased 31.3% yoy to US$344.4m, and reported net profit rose 57.4% yoy to US$234.9m. With the company’s financial performance typically stronger in the second half of the calendar year, we consider our previous full-year forecasts too conservative.
Strong production momentum. FFB rose 10.2% yoy to 2.23m tonnes and CPO production rose 18.4% yoy to 656,605 tonnes, with the oil extraction rate up to 21.9% (1H25: 21.7%). On a clean quarter (ANJ was already consolidated in 2Q25), 2Q26 FFB rose 2.9% yoy and CPO rose 6.9% yoy. Realised CPO price was broadly flat at US$860/tonne (1H25: US$873/tonne).
Highlights
FR delivered 1H26 core net profit of US$216.2m (+42.2% yoy), above expectations at 56%/55% of our/consensus previous full-year forecasts respectively. 2Q26 core net profit of US$119.6m was up 23.8% qoq on higher palm product prices and 38.9% yoy on higher sales volume.
Sales volume ran ahead of production on a net inventory drawdown of 39,000 tonnes (1H25: 75,000-tonne build-up). FFB output grew 10.2% yoy and CPO production rose 18.4% yoy on a full six-month contribution from PT Austindo Nusantara Jaya (ANJ) against two months in 1H25, while refinery EBITDA nearly doubled to US$62.8m.
We lift 2026-28 net profit forecasts by 7-13%. Maintain BUY with a higher target price of S$4.57 (from S$3.65), based on 14x 2027F PE.
Analysis
Above expectations. First Resources’ (FR) revenue rose 44.5% yoy to US$973.6m, EBITDA increased 31.3% yoy to US$344.4m, and reported net profit rose 57.4% yoy to US$234.9m. With the company’s financial performance typically stronger in the second half of the calendar year, we consider our previous full-year forecasts too conservative.
Strong production momentum. FFB rose 10.2% yoy to 2.23m tonnes and CPO production rose 18.4% yoy to 656,605 tonnes, with the oil extraction rate up to 21.9% (1H25: 21.7%). On a clean quarter (ANJ was already consolidated in 2Q25), 2Q26 FFB rose 2.9% yoy and CPO rose 6.9% yoy. Realised CPO price was broadly flat at US$860/tonne (1H25: US$873/tonne).
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$3.95
S$4.57
+15.6%
S$3.65
Analyst
Analyst
Singapore Research Team
research@uobkh.comIMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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