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# Innoprise Plantations Berhad (INNO, 6262) — Fundamental Analysis & Intrinsic Valuation

Bursa Malaysia Main Market · Plantation sector · Analysis as of 24 October 2026

Innoprise Plantations Berhad

Sabah-based oil palm producer with plantation and milling operations. Its earnings depend substantially on palm oil prices, crop yields and production costs.

## Executive summary

Latest observed share price

# RM1.90

Market-data snapshot; exact 23 October closing price not independently verified

FY2025 audited EPS

# 15.30 sen

Down from 18.07 sen in FY2024

FY2025 declared dividends

# 15.00 sen

Including fourth interim dividend declared in 2026

FY2025 dividend yield

# 7.89%

Based on RM1.90, not a guaranteed forward yield

The key investment question is whether Innoprise can sustain its high historical dividend payout while continuing to generate sufficient cash after plantation maintenance and reinvestment.

The latest completed audited financial year is 31 December 2025. The latest reported interim results cover 30 June 2026. I will use audited FY2025 numbers for long-term historical comparisons, incorporating the 2026 interim results to assess current business direction.

One important distinction: Innoprise is a cyclical plantation company, not a mature bank. Its acceptable required return, fair P/E multiple and valuation methodology should reflect commodity-price volatility rather than applying the banking-sector assumptions used in your earlier analysis.

## 1. Historical financial growth analysis

The historical reporting window is FY2015–FY2025 for 10 years, FY2020–FY2025 for five years and FY2024–FY2025 for one year.

### Historical financial values

RM million unless otherwise indicated. Audited 2023–2025 figures take precedence over financial aggregator data.

| Metric | FY2015 | FY2020 | FY2024 | FY2025 |
| ——————- | ——- | ——- | —— | —— |
| Revenue | 115.05 | 153.79 | 276.82 | 273.24 |
| Net profit | 20.08\* | 36.90\* | 86.54 | 73.25 |
| EPS (sen) | 10.50\* | 7.70\* | 18.07 | 15.30 |
| ROE | N/A | \~11.2% | 25.70% | 22.96% |
| Cash equivalents | N/A | N/A | 41.68 | 17.59 |
| Shareholder equity | N/A | N/A | 336.73 | 319.00 |
| Operating cash flow | N/A | N/A | 115.40 | 95.40 |
| FCF, adjusted | N/A | N/A | 82.62 | 66.95 |

\*Earlier-year net profit and EPS are from historical market-data summaries, not independently reconciled here to those years’ audited accounts. The FY2015 EPS uses a different share base and cannot be compared directly with FY2025 EPS. FY2024–2025 values are from audited financial statements.

### Growth comparison

| Metric | 10-year | 5-year | 1-year | Assessment |
| —————– | ——- | ———- | ——– | ————————————– |
| Revenue CAGR | +9.03% | +12.18% | −1.29% | Long-term expansion, recent flattening |
| Net profit CAGR\* | +13.82% | +14.70% | −15.36% | Strong but cyclical |
| EPS growth | N/A\* | \~+14.7%\* | −15.33% | Historical share-base issues |
| ROE | N/A | \~+11.8 pp | −2.74 pp | Strong recent profitability |
| Cash | N/A | N/A | −57.8% | Significant reduction |
| Equity | N/A | N/A | −5.27% | Dividends exceeding retained profit |
| Adjusted FCF | N/A | N/A | −19.0% | Weaker cash generation |
| DPS | N/A | N/A | −3.54% | Remains elevated |

The five-year ROE movement uses the approximately 11.2% FY2020 figure reported in historical sector coverage. Five- and ten-year growth rates for equity, cash and dividends have not been filled without comparable, verified endpoints.

### Calculation examples

Revenue 10-year CAGR:

\\[ \left(\frac{273.240}{115.052}\right)^{1/10}-1 =\boxed{9.03\\%} \\]

Revenue five-year CAGR:

\\[ \left(\frac{273.240}{153.794}\right)^{1/5}-1 =\boxed{12.18\\%} \\]

Audited EPS one-year growth:

\\[ \frac{15.30-18.07}{18.07}\times100 =\boxed{-15.33\\%} \\]

ROE change:

\\[ 22.96\\%-25.70\\%=\boxed{-2.74\text{ pp}} \\]

### Historical trends

Chart values follow the audited series where available, supplemented by historical market summaries. FY2025 uses audited values.

Revenue (RM million)

RM100mRM150mRM200mRM250mRM300m20152016201720182019202020212022202320242025

FY2015–FY2025

Net profit (RM million)

RM0mRM25mRM50mRM75mRM100m20152016201720182019202020212022202320242025

EPS (sen)

4 sen8 sen12 sen16 sen20 sen202020212022202320242025

Shareholder equity and cash (RM million)

Shareholder equityCash equivalents

095190285380202320242025

Only the most recently reconciled years are plotted; the chart does not imply that cash and equity were stable before 2023.

The charts show that Innoprise can earn substantially higher profits when palm oil prices are favorable. However, the earnings pattern is not smooth enough to support extrapolating its historical 14–15% EPS growth into the next decade.

## 2. Business performance and profit sustainability

### What drives Innoprise’s earnings?

The company’s core business is upstream plantation production, including crude palm oil (CPO) and palm kernel (PK). Its operations are concentrated in Sabah.

# 12,246 ha

Mature oil palm area in FY2025

# 4,097 ha

Industrial tree plantations

Plantation activities are geographically concentrated rather than diversified across multiple countries.

Innoprise Plantations Berhad

### FY2025 operational performance

| Operating indicator | FY2024 | FY2025 | Change |
| ————————- | ——- | ——- | ——– |
| CPO production (MT) | 58,881 | 55,614 | −5.55% |
| PK production (MT) | 10,056 | 9,701 | −3.53% |
| CPO selling price (RM/MT) | 4,233 | 4,306 | +1.72% |
| PK selling price (RM/MT) | 2,637 | 3,402 | +29.01% |
| CPO extraction rate | 21.44% | 20.53% | −0.91 pp |
| FFB processed (MT) | 274,625 | 270,864 | −1.37% |

Although selling prices improved, production volumes and extraction efficiency weakened. This explains why favorable commodity prices did not translate into higher FY2025 overall profit.

The audited income statement also shows that other income fell from RM8.17 million in FY2024 to RM2.68 million in FY2025, a reduction of RM5.49 million. The statements include biological asset fair-value movements, which are another reason not to assume every year’s accounting earnings are fully repeatable.

### Latest interim performance: first half 2026

| Metric | H1 2025 | H1 2026 | Growth |
| ———— | ——— | ——— | ——- |
| Revenue | RM127.02m | RM137.75m | +8.44% |
| Net profit | RM32.09m | RM36.95m | +15.11% |
| EPS | 6.70 sen | 7.72 sen | +15.22% |
| Declared DPS | 9.00 sen | 6.50 sen | −27.78% |

The 2026 recovery is encouraging but does not establish a new long-term growth rate.

### Financial strength and cash flow

The audited cash flow statement provides a more cautious picture of dividend capacity.

| RM million | FY2024 | FY2025 |
| —————————- | —— | —— |
| Operating cash flow | 115.40 | 95.40 |
| Property/equipment additions | 22.92 | 17.33 |
| Biological-asset additions | 9.85 | 11.11 |
| Adjusted FCF | 82.62 | 66.95 |
| Dividends actually paid | 57.70 | 90.98 |
| Year-end cash equivalents | 41.68 | 17.59 |

For a plantation company, I prefer subtracting both equipment investment and biological-asset additions when estimating free cash available to shareholders.

\\[ FCF=OCF-Capex-Biological\ Investment \\]

\\[ =95.395-17.329-11.112 =\boxed{RM66.95m} \\]

FY2025 dividends actually paid were RM90.98 million, so:

\\[ \text{Cash coverage} =\frac{66.95}{90.98} =\boxed{0.74\times} \\]

This is below full coverage. It is not proof the next dividend will be cut, but it is a warning against assuming a 15 sen dividend indefinitely.

Profit sustainability conclusion: Innoprise has a profitable operating plantation base and relatively low financial borrowing, but its earnings remain exposed to commodity prices, plantation yields, extraction efficiency and reinvestment needs. Sustainable future EPS growth should be modeled more cautiously than the historical CAGR.

For the valuation, I use these explicit assumptions:

| Scenario | Normalized starting EPS | Annual EPS growth | Exit P/E |
| ———— | ———————– | —————– | ——– |
| Conservative | 14 sen | 0% | 10× |
| Base | 14 sen | 2% | 12× |
| Optimistic | 14 sen | 4% | 14× |

These are valuation assumptions, not company guidance.

## 3. Appropriate required annual return for the plantation sector

For a stable mature bank, a 9–11% required shareholder return may be reasonable under certain assumptions. Innoprise deserves a higher risk allowance because plantation earnings can fluctuate significantly with CPO prices.

My assessment uses a Malaysian equity risk framework, adjusted qualitatively for commodity cyclicality, geographic concentration and low financial debt. These are judgment-based required returns, not a fresh market-beta CAPM estimate.

I recommend 12% as the base required return, with 15% retained for your standard Phil Town comparison.

ROE and required shareholder return are not interchangeable. Innoprise’s FY2025 ROE of 22.96% measures accounting profitability relative to equity. It does not imply shareholders can earn 22.96% annually from buying the share today.

## 4. Phil Town Rule #1 sticker price

For a cyclical plantation company, the choice of sustainable starting earnings is critical.

I use:

| Input | Assumption |
| ———————— | ———- |
| FY2025 audited EPS | RM0.153 |
| Normalized starting EPS | RM0.140 |
| Expected EPS growth | 2% |
| Exit P/E | 12× |
| Forecast period | 10 years |
| Standard required return | 15% |
| Industry-adjusted return | 12% |
| Rule #1 margin of safety | 50% |

Phil Town’s commonly used twice-growth P/E heuristic would suggest only 4× P/E at 2% growth. For Innoprise, that can be overly restrictive as a terminal valuation rule because cyclical businesses do not necessarily trade at P/E multiples directly proportional to near-term EPS growth.

I therefore use an assumed 12× normalized terminal P/E rather than automatically applying twice the projected growth rate. The assumed multiple is broadly consistent with the observed approximately 11.7× trailing P/E, but it is not a verified 10-year historical average.

### A. Standard Rule #1 — 15% return

Step 1: Future EPS

\\[ EPS\_{10}=0.14(1.02)^{10} =\boxed{RM0.1707} \\]

Step 2: Future share price

\\[ P\_{10}=0.1707\times12 =\boxed{RM2.0479} \\]

Step 3: Discount at 15%

\\[ Sticker=\frac{2.0479}{1.15^{10}} =\boxed{RM0.5062} \\]

Step 4: Apply 50% margin of safety

\\[ MOS=0.5062\times0.50 =\boxed{RM0.2531} \\]

Standard Rule #1 at 15%

# RM0.51

Sticker price

# RM0.25

50% MOS buy price

This result excludes the dividends received during the 10-year holding period, as in the simple Rule #1 future-price model.

### B. Industry-adjusted Rule #1 — 12% return

Same growth and exit P/E, but use a lower required return:

\\[ Sticker=\frac{2.0479}{1.12^{10}} =\boxed{RM0.6594} \\]

\\[ 50\\%\ MOS=0.6594\times0.50 =\boxed{RM0.3297} \\]

| Comparison | 15% return | 12% return |
| —————— | ———- | ———- |
| Future EPS | RM0.1707 | RM0.1707 |
| Future share price | RM2.0479 | RM2.0479 |
| Sticker price | RM0.51 | RM0.66 |
| 50% MOS price | RM0.25 | RM0.33 |

This illustrates why required return has such a large impact when future earnings are discounted over a decade.

### Growth sensitivity

The scenarios below use the matching exit P/E assumptions from Section 2.

| Scenario | EPS growth | Exit P/E | Rule #1 value at 12% |
| ———— | ———- | ——– | ——————– |
| Conservative | 0% | 10× | RM0.45 |
| Base | 2% | 12× | RM0.66 |
| Optimistic | 4% | 14× | RM0.93 |

These results should not be interpreted as expected market prices. They are discounted terminal-price valuations that deliberately exclude interim dividends.

## 5. Dividend analysis and hybrid sticker price

### Historical dividend record

| Financial year | Dividend per share |
| —————— | —————— |
| FY2023 | 10.00 sen |
| FY2024 | 15.55 sen |
| FY2025 | 15.00 sen |
| FY2026 H1 declared | 6.50 sen |

The FY2025 dividend includes the fourth interim payment declared on 26 February 2026. The ten-year cumulative dividend was reported at approximately 97.55 sen per share, though a full audited year-by-year ten-year reconciliation was not completed here.

FY2025 dividend payout:

\\[ Payout=\frac{15.00}{15.30}\times100 =\boxed{98.04\\%} \\]

A payout near 100% leaves little earnings buffer for operating deterioration or increased capital expenditure.

For long-term valuation, I use a normalized sustainable dividend of 11 sen per share, with 1% annual dividend growth. This is a cautious modeling assumption, not an announced future dividend policy.

### A. Hybrid Rule #1 + 10-year dividends

This approach adds the present value of projected dividends to the discounted terminal share price.

\\[ Hybrid\ Value= \frac{EPS\_{10}\times PE}{(1+r)^{10}} +\sum\_{t=1}^{10}\frac{D_t}{(1+r)^t} \\]

Dividend assumptions:

\\[ D_t=0.11(1.01)^{t-1} \\]

At 15% required return

\\[ PV\_{terminal}=\boxed{RM0.5062} \\]

\\[ PV\_{dividends}=\boxed{RM0.5712} \\]

\\[ Hybrid=\boxed{RM1.0774} \\]

\\[ 50\\%\ MOS=\boxed{RM0.5387} \\]

At 12% required return

\\[ PV\_{terminal}=\boxed{RM0.6594} \\]

\\[ PV\_{dividends}=\boxed{RM0.6443} \\]

\\[ Hybrid=\boxed{RM1.3037} \\]

\\[ 50\\%\ MOS=\boxed{RM0.6519} \\]

Hybrid valuation — dividend-inclusive

15% required return

# RM1.08

12% required return

# RM1.30

Based on ten years of forecast dividends and terminal P/E valuation, not guaranteed cash receipts.

Important accounting assumption: The terminal 12× P/E is applied to earnings expected after the modeled dividend distributions and related reinvestment decisions. The method assumes those distributions can be made without impairing the 2% EPS growth forecast. Adding dividend PV to an independently modeled dividend-inclusive equity valuation would double-count value; that is not what this calculation does.

### B. Conventional Gordon Growth DDM

Formula:

\\[ DDM=\frac{D_1}{r-g} \\]

Using first-year dividend RM0.11, required return 12% and perpetual growth 1%:

\\[ DDM=\frac{0.11}{0.12-0.01} =\boxed{RM1.00} \\]

The Gordon model’s RM1.00 valuation is below the hybrid model’s RM1.30 valuation because its assumptions about perpetual distributions differ from the terminal earnings-multiple approach. Both models are highly sensitive to dividend sustainability and future growth.

## 6. ROE and price-to-book valuation

The FY2025 audited balance sheet reports:

| Metric | Result |
| ————————- | ——— |
| Shareholders’ equity | RM319.00m |
| Shares outstanding | 478.86m |
| Book value per share | RM0.6662 |
| FY2025 average-equity ROE | 22.96% |
| P/B at RM1.90 | 2.85× |

\\[ BVPS=\frac{319.00m}{478.858m} =\boxed{RM0.6662} \\]

\\[ P/B=\frac{1.90}{0.6662} =\boxed{2.85\times} \\]

Although the P/B is relatively high in relation to accounting book value, this alone does not establish overvaluation. Plantation land, leasehold rights, biological assets and earnings capacity may not be fully captured by book value.

The justified P/B model used for banks is not my preferred valuation method for Innoprise. In particular, applying a stable financial-company ROE formula to volatile plantation earnings would create a misleading impression of precision.

For reference, if one mechanically used FY2025 ROE of 22.96% and its approximately 98% payout ratio, the sustainable book-equity growth estimate would be:

\\[ g=22.96\\%\times(1-0.9804) \approx0.45\\% \\]

That estimate does not mean Innoprise’s total economic earnings or cash generation will grow at only 0.45%. Commodity cycles and plantation asset values are not adequately represented by the stable-growth banking model.

Valuation preference: Use normalized earnings, dividends and a cash-flow cross-check. Treat P/B as a supporting asset valuation indicator, not the principal buy-price calculation.

## 7. Intrinsic valuation interpretation

The principal valuation estimates are:

There is a wide valuation difference because the simple Rule #1 calculation excludes income distributed along the way. That is especially material for Innoprise, where dividends make up a substantial portion of potential shareholder returns.

My central assessment: The dividend-inclusive hybrid model with a 12% required return deserves the greatest weight, subject to the dividend and terminal growth assumptions remaining realistic.

Conservative

## RM1.10

Base case

## RM1.30

Optimistic

## RM1.58

The conservative and optimistic estimates use 0%/10× and 4%/14× EPS-growth and P/E pairs respectively, while holding the dividend path and 12% required return constant. They are illustrative and do not represent confidence intervals.

At RM1.90, the base fair value implies approximately 31% downside to estimated fair value, before recognizing dividends separately. These valuations are total-return frameworks, so their fair values should not be read as forecasts of the market price after ten years.

## 8. Dividend yield and purchase price

### Dividend yield at RM1.90

| Dividend basis | Annual DPS | Yield |
| ——————————— | ———- | —– |
| FY2025 actual | 15.00 sen | 7.89% |
| Last three FYs average | 13.52 sen | 7.11% |
| Last five FYs average | N/A | N/A |
| Normalized sustainable assumption | 11.00 sen | 5.79% |

The five-year figure is omitted because the full period’s dividend-by-financial-year series was not independently reconciled.

### Purchase price required for target dividend yield

Using normalized dividends of RM0.11:

\\[ Target\ Price=\frac{Annual\ DPS}{Target\ Yield} \\]

| Target dividend yield | Purchase price |
| ——————— | ————– |
| 5% | RM2.20 |
| 6% | RM1.83 |
| 7% | RM1.57 |
| 8% | RM1.38 |
| 10% | RM1.10 |

At RM1.38, an 11 sen dividend would produce an 8% yield, but that does not necessarily provide an adequate valuation margin of safety or compensate for dividend-cut risk.

A target dividend yield and an intrinsic value are different decision tools. A share can offer an attractive yield while still being expensive against normalized earnings and cash generation.

## 9. Final investment assessment

### Business quality and investment risks

Positive considerations: Innoprise has established plantation assets, historically strong returns on equity, meaningful dividend distributions and limited conventional financial debt. Its 2026 first-half earnings improved compared with 2025.

Main concerns: Commodity exposure remains substantial. FY2025 profit fell, extraction efficiency declined, cash reserves contracted and dividend payments exceeded adjusted free cash flow for the year. The near-fully-distributed earnings model may restrict reinvestment flexibility.

A further item worth monitoring is the company’s 9 October 2026 announcement that Ernst & Young would resign as external auditor effective 30 October 2026. The company attributed the resignation to a board-requested auditor rotation and stated that there was no disagreement with the auditors. It should not be treated as evidence of accounting misconduct, but the appointment of the replacement auditor and any subsequent audit findings should be followed.

### Investment decision

At the observed RM1.90 share price, the stock trades above all three of my modeled dividend-inclusive valuation outcomes.

Classification: Overvalued relative to the assumptions used here.

Action: Wait before accumulating at the observed price. For a 5–10-year dividend portfolio, the company may still be worth monitoring, but a lower purchase price would improve both prospective income yield and protection against a palm oil downturn.

With base fair value around RM1.30, a 15–20% valuation margin of safety suggests approximately RM1.04–RM1.11 as a more defensive entry range. This range is intentionally conservative and is not a prediction that the market will trade there.

If future evidence supports higher recurring free cash flow, stronger extraction rates or reliably sustained 15 sen dividends, the valuation should be recalculated rather than relying indefinitely on today’s assumptions.

## 10. FINAL STICKER PRICE COMPARISON

All valuations in RM per share. Reference market price: RM1.90. Margin-of-safety prices are calculated as fair value × (1 − discount).

| Valuation model | Required return | Fair value | 15% MOS buy price | 20% MOS buy price | 50% MOS buy price | Upside / downside vs RM1.90 |
| ————————————— | ————— | ———- | —————– | —————– | —————– | ————————— |
| Rule #1 — Standard | 15% | RM0.51 | RM0.43 | RM0.40 | RM0.25 | −73.4% |
| Rule #1 — Industry Adjusted | 12% | RM0.66 | RM0.56 | RM0.53 | RM0.33 | −65.3% |
| Rule #1 + 10-Year Dividends | 15% | RM1.08 | RM0.92 | RM0.86 | RM0.54 | −43.3% |
| Rule #1 + Dividends — Industry Adjusted | 12% | RM1.30 | RM1.11 | RM1.04 | RM0.65 | −31.4% |
| Conventional DDM | 12% | RM1.00 | RM0.85 | RM0.80 | RM0.50 | −47.4% |
| ROE / Justified P/B | 12% | N/A | N/A | N/A | N/A | N/A |
| Industry-specific alternative | N/A | N/A | N/A | N/A | N/A | N/A |

The 15%, 20% and 50% discounts shown on DDM are optional Rule #1-style discounts, not standard DDM requirements. ROE/justified P/B is omitted because the stable-growth financial-business model is inappropriate here. An independent discounted FCF valuation was not completed, so no unsupported value has been inserted.

### Final valuation decision

Final interpretation: The dividend-inclusive hybrid valuation deserves greater weight than the price-only Rule #1 model because Innoprise distributes substantial cash to shareholders. Based on normalized 14 sen EPS, 11 sen sustainable DPS and a 12% required return, the base fair value is approximately RM1.30. At RM1.90, the stock does not offer the margin of safety sought for a new 5–10-year dividend investment. A defensible entry target under these assumptions is approximately RM1.04–RM1.11, recognizing that any sustained improvement in earnings and distributable cash flow would change that assessment.