IOI Corporation (IOI MK) is exploring new growth avenues in large-scale solar (LSS) farms and mergers and acquisitions (M&A) opportunities, according to a report by Maybank Investment Bank (Maybank). Despite these efforts, the company's full-year results are expected to meet Maybank's estimates but fall slightly below consensus expectations.

Maybank maintained a HOLD rating on IOI with an unchanged target price of RM3.95, based on a 19x Fiscal Year 2025 Forecast (FY25F) Price per Earnings (P/E) ratio. The bank highlighted that IOI remains committed to exploring M&A opportunities domestically and abroad in both its upstream and downstream segments.

IOI's 4QFY24 core Profit After Tax and Minority Interests (PATMI) was projected to be between RM280 million and RM305 million, bringing the FY24 estimate to RM1,084 million to RM1,109 million. This performance was supported by an increase in Fresh Fruit Bunch (FFB) output and better crude palm oil (CPO) average selling prices (ASP).

The group's downstream segment was expected to return to profitability in 4QFY24, recovering from a MYR2 million loss in 3QFY24. The improvement was attributed to better price spreads in the refining and oleo industries, as well as strong demand for cocoa butter equivalent products from its associate, Bunge Loders.

The analyst at the bank kept its earnings forecasts for IOI unchanged, noting that while the refining and oleo outlook may have bottomed, it was uncertain if margins would significantly improve in FY25E due to regional overcapacity. Despite the cautious outlook, IOI's continued efforts in solar energy and strategic M&A opportunities present potential growth catalysts.