PublicInvest Sees Egg Prices Rise for Teo Seng

KUALA LUMPUR - Teo Seng Capital Bhd is poised for earnings recovery as egg prices begin to rise, driven by tighter supply following farm closures and adverse weather conditions. Public Investment Bank Bhd (PublicInvest) notes that the egg market has been gradually returning to equilibrium after the removal of government subsidies.

The firm's analysis suggests that the industry is facing a shortage due to high temperatures and haze-related air pollution, which have reduced egg size and production volumes. As a result, 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 recovery could be offset by higher feed costs, as wheat and soymeal account for about 70% of egg production costs. The risk of an El Niño-driven spike in wheat and soymeal prices remains a key downside risk and could offset any benefit from higher egg prices.

Following a recent meeting with Teo Seng's management, PublicInvest raised its earnings forecasts for financial years 2026 to FY28 by an average of 29%. The firm also expects the group's higher-margin animal health segment to support net profit and partly cushion the cyclical nature of its poultry business.