TA Research is maintaining its FY25-FY26 earnings forecast for PGF.
PETALING JAYA: PGF Capital Bhd
’s earnings from its manufacturing division is expected to improve further in the financial year 2025 (FY25) and FY26, underpinned by stringent housing requirements in Australia and the rolling out of infrastructure projects, says TA Research.
This includes the rolling out of projects such as light rapid transit as well as airport expansion in Penang.
TA Research said there is a possibility of PGF having to undertake an expansion plan due to the shortage of capacity as a result of growing demand for glass wool insulation.
It said demand would tend to pick up in Australia after the Christmas and New Year period.
“Hence, the company is in search of land in Kulim or Banting, or even considering converting its existing warehouse in Seberang Prai to make way for the additional capacity,” it said in a report.
Serving as its main operating hub, PGF’s manufacturing plant in Seberang Perai spans across 38,614 sq m and has the capacity to produce 25,000 tonnes of glass mineral wool-related products annually.
PGF net profit rose by 69.81% year-on-year (y-o-y) to RM6.7mil in the first quarter of financial year 2025 (1Q25) from RM3.94mil in the same quarter of the previous year.
It achieved revenue of RM40.51mil with a basic earnings per share of 4.06 sen.
Insulation segment remains its major contributor with RM40.33mil or 99.56%, while investment holdings and other segments contributed RM0.10mil and RM0.07mil, respectively.
Its property development, on the other hand, reported a pre-tax loss of RM0.29mil due to the increase in expenditure incurred during the quarter.
According to TA Research, PGF’s earnings for 1Q25 accounted for 15.3% of its full-year forecast.
“However, we consider this as within expectations as FY25 earnings is expected to be back-end loaded with a lumpy land sale gain,” it said.
TA Research stated that PGF’s core net profit grew 59.5% y-o-y to RM6.4mil from RM4.7mil, on the back of 42.2% rise in revenue.
The performance was said to be attributable to the proliferation of glass wool insulation demand, which led to high production efficiency.
The research house is maintaining its FY25-FY26 earnings forecast for PGF. It is also maintaining a “buy” call on PGF with a target price of RM2.76 per share.
