CCK poised for earnings inflection on Sarawak, Indonesia growth

KUCHING (Dec 30): CCK Consolidated Holdings Bhd (CCK) is positioned for an earnings inflection, driven by its dominant retail footprint in Sarawak and accelerating expansion into Indonesia.

The research team at RHB Investment Bank Bhd (RHB Research) said CCK’s vertically integrated retail model capitalises on Sarawakís urbanisation and estimated 4.6 per cent of gross domestic product (GDP) growth tailwind for 2026 to 2030.

“In Indonesia, with an eight times larger population versus Malaysia, the new food processing facility starting in the first quarter of 2026 (1Q26) initiates a multi-year capacity ramp-up, with managementís proven ability to scale production supporting its projected earnings cumulative annual growth rate (CAGR) of 6.9 per cent,” it said.

With its Indonesian food processing plant already at optimal utilisation, RHB Research noted that CCKís 60 per cent-owned subsidiary, Adilmart, plans to triple capacity via a third facility, adding 3,000-4,000 tonnes of monthly capacity by 1Q26 to meet unmet demand and expand nationwide distribution.

The plan is backed by a strong execution track record, having doubled capacity from 1,000 tonnes per month to 2,000 tonnes per month in 2020, alongside strong market absorption that saw Indonesia sales rise from RM116 million in 2020 to RM212.3 million in 2024.

“Our FY26 forecast assumes a conservative 20 per cent utilisation (circa 800 tonnes per month), near breakeven, with faster ramp-up offering valuation upside.

“As Sarawak’s largest fresh mart operator, its scale and vertically integrated model support strong pricing power and cost efficiency, underpinning steady margins with gross profits improving from 18 per cent in FY22 to 21 per cent in FY24.”

With 73 outlets across East Malaysia and a planned rollout of two new stores annually, CCKís defensive, cash-based consumer staples business is well positioned to grow alongside Sarawak.

The group is also a direct beneficiary of rising household incomes and government support initiatives like the MyKasih programme, which sustain spending on essential food items.

“As a mass-market fresh food retailer with a broad reach and affordable pricing, it is well-positioned to capture incremental wallet share from lower- and middle-income households. This supports resilient same-store sales growth and stable cash flow.”