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After excluding extraordinary items, Hock Soon is to make a net profit of RM30.9 million for the financial year ending Sept 2026 (FY2026) compared to RM3 million in FY2025, according to the research house’s forecasts.
Hock Soon Capital: Poised for a "Golden Egg" Opportunity in Singapore?
Main Market-bound Hock Soon Capital Bhd (Hock Soon) is shaping up to be one of the most interesting listings of the first quarter. Scheduled to list on February 13, the Perak-based poultry producer is pricing its IPO at 60 sen per share, valuing the group at approximately RM300 million.
While the company is already a staple in the domestic market with its QPlus brand, the real excitement for investors lies in its export strategy—specifically, a pending entry into the lucrative Singapore market.
The Singapore Catalyst: Chasing the "50-Cent" Premium
The most compelling narrative for Hock Soon’s growth is its plan to begin exporting to Singapore as early as Q1 2026, pending approval from the Singapore Food Agency (SFA).
Why is this a game-changer? Pricing power.
Unlike Malaysia, where table egg prices are often subject to price controls or ceilings to ensure affordability, Singapore operates on an open market system heavily reliant on imports.
- The Price Gap: Industry observers note that retail egg prices in Singapore can fetch significantly higher rates—potentially reaching up to 50 cents (SGD) or more per egg for premium and nutrient-enriched categories (like Hock Soon's QPlus range).
- Margin Expansion: Even after accounting for logistics and exchange rates (with the SGD remaining strong against the Ringgit), the margin contribution from Singapore exports is expected to be far superior to domestic sales.
- Demand Supply Mismatch: Executive Director Alex Ong Keat Hoe has highlighted that local supply in Singapore remains insufficient to meet demand, making the Republic's close proximity to Peninsular Malaysia a strategic advantage for fresh delivery.
Key Takeaway: If Hock Soon secures SFA approval, the shift from selling solely in Ringgit (domestic) to earning Singapore Dollars (exports) could provide a significant uplift to the group's bottom line in FY2026 and beyond.
Aggressive Expansion: Doubling Production Capacity
Hock Soon is not just relying on higher prices; it is also aggressively scaling volume. The group plans to raise RM60 million from the public issue, with the vast majority (nearly 90%) allocated to a massive expansion project.
- New Facility: A new poultry farm is being developed in Teluk Intan, Perak.
- Capacity Boost: Upon completion, this new farm is expected to add 1.53 million eggs per day to the group's output.
- Total Impact: This represents a near-doubling (~95% increase) of their existing capacity of 1.63 million eggs per day.
This capacity expansion is timed well to capture the anticipated export demand while maintaining their stronghold in the Central Region of Peninsular Malaysia, which currently contributes over 75% of their revenue.
Investors looking at the IPO price of 60 sen are entering at a valuation that appears reasonable compared to the broader industry.
IPO Price = RM0.60
Market Cap = ~RM300 Million
FY2025 Revenue = RM147.4 Million
FY2025 Net Profit = RM42 Million
PE Ratio = 7.1x
- Peer Comparison: With a Price-to-Earnings (PE) ratio of 7.1 times (based on FY2025 earnings), Hock Soon is priced at a discount compared to established giants like QL Resources or Teo Seng Capital, which typically trade at double-digit PE multiples.
- Management View: The management openly acknowledges they are an "emerging player" compared to these mature peers, which offers investors a "growth stage" entry point rather than a saturated one.
The Bottom Line
Hock Soon Capital presents a classic "growth at a reasonable price" setup. While they face the usual risks of the poultry industry (feed costs and disease outbreaks), the dual engines of doubling production capacity and the high-margin Singapore export potential provide a strong neutral-positive outlook.
If the SFA approval comes through in Q1 as targeted, the narrative for Hock Soon could quickly shift from a domestic volume play to a regional margin play.
