KUALA LUMPUR: Yenher Holdings Bhd is expected to face minimal disruption from the ongoing African Swine Fever (ASF) outbreaks, Hong Leong Investment Bank Bhd (HLIB Research) said.

The research firm said Yenher is now better positioned to weather ASF-related risks, having scaled up premix sales to poultry in 2024, which reduces its reliance on the swine segment.

"Historically, ASF's impact on Yenher has been moderate, with core earnings declining annually at only 5.6 per cent in 2022 and 2.24 per cent in 2023 at the height of ASF.

"While sporadic outbreaks occur in Malaysia, many cases go unreported and the company has shown resilience in dealing with such challenges," it said in a note.

According to media reports, ASF was detected in two swine farms in Selangor at Sungai Blankan, Sepang and Kampung Tumbuk, Tanjung Sepat, Kuala Langat. 

The Selangor Veterinary Services Department received a complaint on Jan 22, leading to tests on 25,000 swine from 29 farms between Jan 24 to 25, confirming ASF in two farms. 

HLIB Research said it does not expect material earnings impact and the ASF outbreak could also even accelerate vaccine approval, where Yenher holds exclusive distributorship. 

It added that the outbreak could turn into a silver lining, as heightened media attention may push authorities to accelerate vaccine approval.

"Yenher holds the exclusive distributorship for an ASF vaccine, which is already approved for use in Vietnam and the Philippines but has yet to receive approval in Malaysia. 

"Given food security concerns and inflationary pressures, there is a strong case for approval," HLIB Research said.

The firm kept its "buy" rating on Yenher with an unchanged target price of RM1.45 a share based on price-to-earnings  ratio (P/E) of 16 times pegged to mid-FY26 earnings per share (EPS).