MARC RATINGS AFFIRMS AA-IS RATING ON GUAN CHONG'S RM800.0 MILLION SUKUK PROGRAMME

MARC Ratings has affirmed its rating of AA-IS on Guan Chong Berhad's (GCB) RM800.0 million Sukuk Wakalah Programme. The rating outlook remains stable.

The rating affirmation reflects GCB's established market position as the world's fourth-largest cocoa grinder, supported by its geographically diversified customer base and longstanding relationships with major multinational confectionery companies. The group serves about 950 customers across more than 80 countries, including cocoa traders and confectionery manufacturers such as Barry Callebaut AG, Mars, Incorporated, and Nestle S.A. Although the top three customers accounted for more than 23% of revenue, their long-term relationships with GCB and the group's proven track record of reliable delivery largely mitigate customer concentration and migration risks.

Cocoa bean prices have eased considerably to an average of USD4,395/MT in June 2026 from the historical high of nearly USD12,000/MT in December 2024, as supply conditions improved. However, prices are expected to gradually trend upwards again towards the mid-USD6,000/MT range by end- 2026 and to remain at this level through mid-2027 as renewed weather-driven supply concerns emerge. Prices could settle around USD4,500/MT over the longer term as supply and demand rebalance. Production expectations in West African countries for the upcoming 2026/27 crop season have declined amid forecasts of continued hot and dry weather in the region.

GCB's revenue increased by 42.9% year-on-year to RM14.9 billion in 2025, largely reflecting the passthrough of the earlier elevated cocoa bean costs. Average selling prices of cocoa butter and cocoa powder increased by 71% and 64%, respectively, in 2025 compared with the previous year. Revenue growth was price-led, as overall sales volume declined slightly amid weaker demand from chocolate manufacturers facing elevated input costs. In 1H2026,