KUALA LUMPUR (June 19): Shares of PPB Group Bhd (KL:PPB) fell below the RM10 mark on Thursday — a level last seen more than 16 years ago, on April 10, 2009.

The agrifood conglomerate has fallen for three consecutive trading days after news emerged that its 18.8%-owned associate, Wilmar International Ltd, has placed a US$729 million (RM3.1 billion) security deposit with Indonesia’s Attorney General Office amid corruption charges. The deposit is pending a ruling by the Supreme Court.

In the past three trading days, PPB shares dropped 9.2%, or RM1.01, to RM9.97, bringing the group’s market capitalisation to RM14.18 billion. Year-to-date, the stock has declined 19.6%.

Total volume over the three-day period reached 2.243 million shares, averaging 747,800 shares per day — slightly above the 200-day moving average of 545,682 shares.

Meanwhile, Wilmar declined 11 cents, or 3.6%, over the same period to S$2.91 (RM9.63), valuing the Singapore-listed firm at S$18.6 billion. It has declined 6.1% year-to-date.

According to Bloomberg, PPB’s average target price from five analysts has been revised down to RM12.18 from RM13.30, primarily due to a downgrade by Kenanga Research.

The firm cut its target price to RM10.50 from RM15, citing a higher risk premium, and lowered its rating from ‘outperform’ to ‘market perform’. Currently, the stock carries three ‘hold’ calls and two ‘buy’ calls.

Kenanga Research observed that the development could raise the group’s risk premium and weigh on the stock for as long as the matter remains unresolved, especially given that Indonesia accounts for approximately 10% of its business operations.

The research house also highlighted that the US$729 million security deposit will be forfeited if the Supreme Court rules against Wilmar, but refunded if the court upholds the earlier decision by the Central Jakarta Court.

Kenanga estimated PPB’s share of the deposit would be about RM600 million or 42 sen per share.

As of end-March 2025, PPB held total cash of RM1.761 billion, compared to total borrowings of RM305.16 million.

Wilmar remains PPB’s key profit contributor. In FY2024, Wilmar contributed RM992 million to PPB’s total profit before tax of RM1.33 billion.

In a statement to the Singapore Exchange (SGX) on April 14, Wilmar stated that, to its knowledge, the investigations had not implicated the group or any of its employees. The company also affirmed its willingness to cooperate with authorities if required.

Wilmar added that it does not believe it is guilty of the charges, explaining that its actions at the time were intended to assist the government in improving domestic availability and lowering prices.