Key Indices
Top Stories
Strategy | Impact Assessment For The FBMKLCI-50 Adoption
- Yesterday, Bursa and FTSE Russell jointly announced plans to widen the number of FBMKLCI Index constituents from 30 to 50. Concurrently, the FBM70 will be reduced from 70 to 50 constituents and renamed the FTSE Bursa Malaysia Mid Cap Index from 21 Dec 26. Implementation will be phased to facilitate orderly portfolio rebalancing and minimise concentrated trading flows. Our impact assessment suggests modest negative impact (at worst) to the incumbent FBMKLCI constituents, and modest positive impact on new component members.
Company Results | Dialog Group (DLG MK/BUY/RM1.96/Target: RM2.95)
- FY26 results were in line with our forecasts, but beat market expectations. The downstream segment contributed most of FY26 earnings growth. Midstream earnings are on peak-cycle earnings. Upstream earnings did benefit from higher oil prices, but production has yet to revert to normal. We expect DLG to continue benefitting from high oil prices, as its volume recovers and new PSC earnings from Cendramas (1QFY27) and the Baram Junior Cluster (early startup by 2QFY27) come through. Maintain BUY; target price: RM2.95.
Company Results | Genting Malaysia (GENM MK/BUY/RM1.73/Target: RM2.36)
- GENM delivered improved earnings, as RWNYC’s official commercial casino transition lifted earnings significantly despite flattish RWG and UK operations. We anticipate stronger quarters ahead as RWNYC’s robust earnings growth continues to take centre stage. Overall, GENM’s valuations remain well below its intrinsic value, with resilient earnings growth expected in 2026-27. Maintain BUY. Target price: RM2.36.
Company Results | Pecca Group (PECCA MK/HOLD/RM1.32/Target: RM1.42)
- Pecca’s FY26 earnings fell short of our forecasts due to weaker-than-expected margins. The group’s diversification strategy progressed more slowly than we expected, while earnings will take time to fully ramp up. As such, we wait for a clearer earnings inflection point before turning more constructive on the stock. Downgrade to HOLD with a lower target price of RM1.42.
Company Results | Telekom Malaysia (T MK/HOLD/RM8.10/Target: RM7.50)
- 2Q26 core net profit (excluding Prihatin employee separation cost and forex losses) rose 5% yoy but fell 7% qoq to RM406m. The sequential earnings weakness was due to high content cost for the FIFA World Cup, booked in Jun 26. 1H26 core net profit of RM843m (+7% yoy) is in line with house and street’s expectations. Maintain HOLD with a DCF-based target price of RM7.50.
What’s Inside
Company Results | Coraza Integrated Technology (CORAZA MK/BUY/RM1.17/Target: RM1.33)
- 1H26 results came in within expectations. 2Q26 revenue marks the group’s ninth consecutive quarter of yoy growth and another record quarterly revenue achievement, supported by sustained demand from both front-end and backend semiconductor customers. Its outstanding orderbook currently stands at RM160m, 23% higher than last quarter, with the majority comprising robust semiconductor order loadings. We raise 2027 earnings forecast by 13% to account for a higher sales assumption for the semiconductor segment. Maintain BUY. Target price: RM1.33.
Company Results | Gas Malaysia (GMB MK /HOLD/RM5.15/Target: RM6.00)
- 2Q26 earnings came in weak at RM73m (-27% yoy; -22% qoq) on the back of lower NG margins per GJ, reflecting lower NG prices, higher opex and finance cost. This brings 1H26 net profit to RM165m (-17% yoy), below expectations. We trim 2026 net profit by 4% as opex will remain high in 2H26, partly offset by a strong 4Q26 given elevated NG prices. Maintain HOLD with a fair value of RM6.00.
Company Results | Genting Bhd (GENT MK/BUY/RM2.24/Target: RM2.66)
- GENT’s 2Q26 results came in within expectations, with the earnings improvement reflecting better contributions from subsidiaries GENS and GENM. Negatively, softer RWLV performance due to seasonality partially dragged earnings. We anticipate GENT to deliver a sequentially better 2H26, leveraging on subsidiaries’ better performances following the de-escalation of the Middle East tensions. Maintain BUY with a lower target price of RM2.66 as we incorporate lower target prices for its subsidiaries into our SOTP valuations.
Company Results | Kossan Rubber Industries (KRI MK/BUY/RM1.14/Target: RM1.31)
- Kossan reported stronger yoy revenue and core earnings in 2Q26. The earnings strength mainly stemmed from higher ASPs and better volume sales, besides marginally stronger MYR/USD rate. For the rest of 2026, we anticipate a normalising earnings base as ASPs have moderated 15-20% from 2Q26’s peak following the deescalation of the Iran war. Kossan’s strong balance sheet and potentially better capital management, besides cleanroom expansions are still key re-rating catalysts. Maintain BUY with a higher target price of RM1.31.
Company Results | Magnum (MAG MK/BUY/RM1.26/Target: RM1.60)
- Magnum’s 2Q26 results came in above our expectations. Gaming revenue improved yoy as prolonged jackpot run and exceptionally low prize payout lifted earnings, offsetting the one fewer draw day during the quarter. Despite overall sentiment on gaming stocks remaining lacklustre, Magnum remains appealing for its lush dividend yield (8.1-8.4% in 2026-28) and potential U-Mobile monetisation. Retain BUY with an unchanged target price of RM1.60.
Company Update | Mah Sing Group (MSGB MK/BUY/RM1.17/Target: RM1.42)
- Mah Sing announced the disposal of 78.8 acres of freehold land at Southville City for RM617.9m, or RM180psf, to WG Malaysia X Sdn Bhd. We view the announcement positively as it marks further progress in monetising Southville City’s DC Land. Assuming a net margin of 20-30% on the RM617.9m disposal, we estimate a potential net gain of RM124m-185m, accounting for 40%-60% of our 2027 earnings forecast. Pro-forma target price will increase by 2-4% to RM1.45-1.47. Maintain BUY with an unchanged target price of RM1.42 for now.
Market Spotlight
- Despite selling pressure, the FBMKLCI added 5.39pt to close at 1,736.71 yesterday on the back of rejuvenated buying interest.
- US stocks were lower after the close on Thursday, as losses in the consumer services, healthcare and industrials sectors led shares lower.
Tehnical Analysis
FBMKLCI, FCPO & FKLI Index Outlook
Traders’ Corner
NEXG | NEXG MK
- Trading Buy Range: RM0.315-0.32
Paramount Corporation | PAR MK
- Trading Buy Range: RM1.04-1.05
Top Glove Corporation | TOPG MK
- Trading Buy Range: RM0.68-0.685
Top Stories
Strategy | Impact Assessment For The FBMKLCI-50 Adoption
- Yesterday, Bursa and FTSE Russell jointly announced plans to widen the number of FBMKLCI Index constituents from 30 to 50. Concurrently, the FBM70 will be reduced from 70 to 50 constituents and renamed the FTSE Bursa Malaysia Mid Cap Index from 21 Dec 26. Implementation will be phased to facilitate orderly portfolio rebalancing and minimise concentrated trading flows. Our impact assessment suggests modest negative impact (at worst) to the incumbent FBMKLCI constituents, and modest positive impact on new component members.
Company Results | Dialog Group (DLG MK/BUY/RM1.96/Target: RM2.95)
- FY26 results were in line with our forecasts, but beat market expectations. The downstream segment contributed most of FY26 earnings growth. Midstream earnings are on peak-cycle earnings. Upstream earnings did benefit from higher oil prices, but production has yet to revert to normal. We expect DLG to continue benefitting from high oil prices, as its volume recovers and new PSC earnings from Cendramas (1QFY27) and the Baram Junior Cluster (early startup by 2QFY27) come through. Maintain BUY; target price: RM2.95.
Company Results | Genting Malaysia (GENM MK/BUY/RM1.73/Target: RM2.36)
- GENM delivered improved earnings, as RWNYC’s official commercial casino transition lifted earnings significantly despite flattish RWG and UK operations. We anticipate stronger quarters ahead as RWNYC’s robust earnings growth continues to take centre stage. Overall, GENM’s valuations remain well below its intrinsic value, with resilient earnings growth expected in 2026-27. Maintain BUY. Target price: RM2.36.
Company Results | Pecca Group (PECCA MK/HOLD/RM1.32/Target: RM1.42)
- Pecca’s FY26 earnings fell short of our forecasts due to weaker-than-expected margins. The group’s diversification strategy progressed more slowly than we expected, while earnings will take time to fully ramp up. As such, we wait for a clearer earnings inflection point before turning more constructive on the stock. Downgrade to HOLD with a lower target price of RM1.42.
Company Results | Telekom Malaysia (T MK/HOLD/RM8.10/Target: RM7.50)
- 2Q26 core net profit (excluding Prihatin employee separation cost and forex losses) rose 5% yoy but fell 7% qoq to RM406m. The sequential earnings weakness was due to high content cost for the FIFA World Cup, booked in Jun 26. 1H26 core net profit of RM843m (+7% yoy) is in line with house and street’s expectations. Maintain HOLD with a DCF-based target price of RM7.50.
What’s Inside
Company Results | Coraza Integrated Technology (CORAZA MK/BUY/RM1.17/Target: RM1.33)
- 1H26 results came in within expectations. 2Q26 revenue marks the group’s ninth consecutive quarter of yoy growth and another record quarterly revenue achievement, supported by sustained demand from both front-end and backend semiconductor customers. Its outstanding orderbook currently stands at RM160m, 23% higher than last quarter, with the majority comprising robust semiconductor order loadings. We raise 2027 earnings forecast by 13% to account for a higher sales assumption for the semiconductor segment. Maintain BUY. Target price: RM1.33.
Company Results | Gas Malaysia (GMB MK /HOLD/RM5.15/Target: RM6.00)
- 2Q26 earnings came in weak at RM73m (-27% yoy; -22% qoq) on the back of lower NG margins per GJ, reflecting lower NG prices, higher opex and finance cost. This brings 1H26 net profit to RM165m (-17% yoy), below expectations. We trim 2026 net profit by 4% as opex will remain high in 2H26, partly offset by a strong 4Q26 given elevated NG prices. Maintain HOLD with a fair value of RM6.00.
Company Results | Genting Bhd (GENT MK/BUY/RM2.24/Target: RM2.66)
- GENT’s 2Q26 results came in within expectations, with the earnings improvement reflecting better contributions from subsidiaries GENS and GENM. Negatively, softer RWLV performance due to seasonality partially dragged earnings. We anticipate GENT to deliver a sequentially better 2H26, leveraging on subsidiaries’ better performances following the de-escalation of the Middle East tensions. Maintain BUY with a lower target price of RM2.66 as we incorporate lower target prices for its subsidiaries into our SOTP valuations.
Company Results | Kossan Rubber Industries (KRI MK/BUY/RM1.14/Target: RM1.31)
- Kossan reported stronger yoy revenue and core earnings in 2Q26. The earnings strength mainly stemmed from higher ASPs and better volume sales, besides marginally stronger MYR/USD rate. For the rest of 2026, we anticipate a normalising earnings base as ASPs have moderated 15-20% from 2Q26’s peak following the deescalation of the Iran war. Kossan’s strong balance sheet and potentially better capital management, besides cleanroom expansions are still key re-rating catalysts. Maintain BUY with a higher target price of RM1.31.
Company Results | Magnum (MAG MK/BUY/RM1.26/Target: RM1.60)
- Magnum’s 2Q26 results came in above our expectations. Gaming revenue improved yoy as prolonged jackpot run and exceptionally low prize payout lifted earnings, offsetting the one fewer draw day during the quarter. Despite overall sentiment on gaming stocks remaining lacklustre, Magnum remains appealing for its lush dividend yield (8.1-8.4% in 2026-28) and potential U-Mobile monetisation. Retain BUY with an unchanged target price of RM1.60.
Company Update | Mah Sing Group (MSGB MK/BUY/RM1.17/Target: RM1.42)
- Mah Sing announced the disposal of 78.8 acres of freehold land at Southville City for RM617.9m, or RM180psf, to WG Malaysia X Sdn Bhd. We view the announcement positively as it marks further progress in monetising Southville City’s DC Land. Assuming a net margin of 20-30% on the RM617.9m disposal, we estimate a potential net gain of RM124m-185m, accounting for 40%-60% of our 2027 earnings forecast. Pro-forma target price will increase by 2-4% to RM1.45-1.47. Maintain BUY with an unchanged target price of RM1.42 for now.
Market Spotlight
- Despite selling pressure, the FBMKLCI added 5.39pt to close at 1,736.71 yesterday on the back of rejuvenated buying interest.
- US stocks were lower after the close on Thursday, as losses in the consumer services, healthcare and industrials sectors led shares lower.
Tehnical Analysis
FBMKLCI, FCPO & FKLI Index Outlook
Traders’ Corner
NEXG | NEXG MK
- Trading Buy Range: RM0.315-0.32
Paramount Corporation | PAR MK
- Trading Buy Range: RM1.04-1.05
Top Glove Corporation | TOPG MK
- Trading Buy Range: RM0.68-0.685
Key Indices
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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