Malaysia Egg Prices Set to Recover, Boosting Teo Seng Earnings

Teo Seng Capital Bhd's earnings are expected to recover as egg prices improve in Malaysia. Public Investment Bank Bhd (PublicInvest) noted early signs of an egg price recovery, driven by tighter supply following farm closures and adverse weather conditions.

The removal of government subsidies has led to a return to equilibrium in the egg market, with some layer farms exiting the industry due to difficulties in converting from open-air to closed-house systems. Challenging weather conditions have reduced egg size and production volumes.

PublicInvest expects egg supply in the coming quarter to be lower, with a higher proportion of smaller-sized eggs, providing near-term price support. However, the risk of an El Niño-driven spike in wheat and soymeal prices remains a key downside risk that could offset any benefit from higher egg prices.

The firm raised its earnings forecasts for Teo Seng by an average of 29% for financial years 2026 to 2028, reflecting expectations of recovering egg prices. The group's higher-margin animal health segment is also expected to support net profit and partly cushion the cyclical nature of its poultry business.