First Resources shares rise 6.3% on Q3 profit surge

Analysts are positive on the palm oil producer, and have set higher target prices

Shares of First Resources jumped as much as 8.8 per cent on Monday (Nov 17), after it reported a strong third-quarter profit increase.

The counter climbed to S$2.23 at 10.41 am, then pared back some gains to close 6.3 per cent up at S$2.18. It had ended the trading week on Friday (Nov 14) at S$2.05.

The palm oil producer posted a 43.5 per cent increase in net profit for the third quarter on Friday. The US$87.5 million figure eclipsed the US$61 million in the third quarter of 2024, which was attributed to higher average selling prices and sales volumes.

First Resources’ positive share price move comes as the group tempered expectations of palm oil production growth. It said that the potential expansion of Indonesia’s biodiesel mandate may tighten the supply-demand outlook and lend support to palm oil prices.

This may occur even as US tariff developments and broader macroeconomic conditions continue to influence market prices of palm and other vegetable oils, the company said.

Maybank’s Ong Chee Ting turned more positive on First Resources, lifting its earnings forecasts by a range of 9 to 15 per cent and raising its target price from S$1.90 to S$2.40, while reiterating a “buy” call.

The analyst assigned a higher 10 times 2026 financial year price-to-earnings valuation, citing stronger operating visibility and quicker-than-expected clean-up of newly acquired Austindo Nusantara Jaya (ANJ), as well as the disposal of loss-making and non-core assets.

Ong added that improved selling prices, firm biodiesel margins and better production growth support a more resilient earnings base, with dividend yields of about 6 per cent expected.

RHB research also kept a “buy” call, but raised its target price to S$2.55, from S$2.10 previously. The broker said it expects earnings momentum to continue into the fourth quarter as production peaks and costs ease.

It added that the full contribution from the ANJ acquisition should lift performance further in 2026, with cost synergies to follow. Stronger crude palm oil output, rising downstream margins from higher biodiesel volumes and higher selling prices underpin the more positive outlook.

First Resources shares have climbed nearly 50 per cent in the year to date, and more than 70 per cent in the past five years, compared to about 20 and 63 per cent, respectively, for the Straits Times Index.

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