Malaysian Pacific Industries Bhd posted relatively subdued quarterly earnings in 3QFY25, with revenue declining marginally by 1.2% YoY to RM520m – versus RM526m in 3QFY24 – underscoring persistent softness across key end markets. Profitability remained under pressure, with core profit after tax and minority interests (PATAMI) plunging 23% year-on-year , primarily due to less favourable product mix, and earnings before interest, taxes, depreciation, and amortisation margin narrowing by 4 percentage points YoY to 23%. Geographically, Europe sales weakened (-7.4% quarter-on-quarter, -5.5% YoY) as the automotive segment remained lacklustre. US sales saw a notable sequential pickup of +23.5% QoQ, but the region continued to post a 6.3% YoY contraction, likely attributable to prolonged inventory adjustments, in light of macroeconomic uncertainty. Cumulatively, U.S. sales in 9MFY25 contracted by 20.2% YoY, dragging MPI’s core PATAMI by 14.5% YoY to RM109.1m – making up only 55% of our full-year estimate and 69% of consensus – falling short of expectations. The group declared a second interim dividend of 25 sen per share, bringing total year-to-date dividend per share to 35 sen. As we roll forward our valuation, we reiterate our Buy call, but with a lower target price of RM22.58 (from RM26.80), based on 27x price-to-earnings ratio (PER) (-1.5 standard deviation of 3-year average forward PER) applied to FY26F earnings per share of 83.6 sen. – BIMB Securities Sdn Bhd (May 29, 2025)
(Calls by analysts tracked by Bloomberg: 5 Buy, 2 Hold, 1 Sell; Consensus target price: RM21.99)
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