TEOSENG (7252)-Main market, Consumer products & services- Agricultural products

Profile Teo Seng Capital is a Malaysian-based integrated layer farming company with diverse business operations. Its core activities include feedmill operations, production of paper egg trays, manufacturing of animal health products, egg processing, and fertilizer production

Outlook Expansion in egg production capacity (estimated to 4.5m eggs per day by end 2024) and expansion of downstream product range (eg boiled eggs and processed old hen products) will support its longer term earnings stability, in anticipation of post price ceiling and subsidy removal. Moreover, healthy growth prospects for animal health products amid growing trend of pet humanisation, rising e-commerce trend and management’s relentless efforts in expanding its distribution brands is expect to support further growth. 

Technical review TEOSENG is trading at 5.8x FY25E P/E (vs 5Y avg 8x), supported by 5.1% FY25E DY.  The stock is building a base near 1.72 or 200d MA levels. A successful breakout above immediate hurdles at 1.76-1.79 could spur greater upside towards 1.90-2.03 zones. 

✅Current price: RM1.73
✅Entry: RM1.66-1.70-1.72
✅Resistance: RM1.79-1.90-2.03
✅Cut loss: RM1.64
✅Risk profile: Medium

Source: Hong Leong Investment Bank Research - 10 Jul 2024