KUALA LUMPUR: Agro-based food manufacturer QL Resources Bhd's RM1.3 billion QL Innofood Park project in Perak is expected to deliver a meaningful financial contribution only in the later stages of its multi-year development, CIMB Securities Sdn Bhd said.

The firm said while it is positive on the project's strategic merits, earnings contribution from the park is expected to be back-end loaded.

It added that QL Resources' near-term operating conditions remain challenging, with intensifying competition in the marine products, poultry and processed food segments weighing on margins, alongside softer demand growth due to a high-base effect.

"As a result, we believe QL Resources' near-term earnings growth is likely to remain subdued, driven by input cost volatility and intensifying pricing competition.

"The strategic benefits of the project are therefore skewed toward the medium to long term, with limited earnings uplift expected from financial year 2026 to financial year 2027," it said.

QL Resources plans to expand the production capacity of its marine products segment through the QL Innofood Park project, which will be developed by its wholly owned subsidiary, QL Foods Sdn Bhd.

The project is intended to become a new regional food manufacturing hub and will allow QL Resources to diversify its product range beyond surimi into higher value-added, protein-based products.

The development will be carried out in phases over 10 years from 2026.

CIMB Securities said it maintains the "Hold" rating on QL Resources, with an unchanged target price of RM4.60.

"We project a subdued three-year core net profit compound annual growth rate of three per cent from financial year 2025 to financial year 2028, reflecting the soft operating environment, weaker sales demand, and sustained cost pressures in the near term," the firm adds.