
MEGA First Corporation Bhd recorded 2QFY25 core net profit (CNP) of RM93.5m (+44.5% quarter-on-quarter, –15.3% year-on-year), bringing 6MFY25 CNP to RM158.3m, which accounts for only 33% of our full-year forecast and 35% of consensus estimates. The shortfall was mainly due to weaker-than-expected contributions from the resources and packaging divisions, as well as extended associate losses at Edenor Technology Sdn Bhd, which continued to weigh on group earnings. Earnings are expected to improve modestly, supported by stronger hydrology at Don Sahong Hydropower (DSHP) during the Mekong Basin’s peak rainy season. However, this seasonal uplift is likely to be partially offset by FX translation losses from the continued strengthening of the Ringgit against the US dollar. We cut FY25F/FY26F/FY27F earnings by 13.1%/13.7%/12.2%, reflecting lower US dollar/RM assumptions (4.30 vs. 4.35 previously), more conservative margin assumptions for resources and packaging, and a longer-than-expected recovery path for Edenor Technology. Post-revision, our sum-of-parts-derived target price falls to RM3.68 (from RM5.43). We maintain a three-star ESG rating and downgrade our call to Hold from Buy. — MBSB Investment Bank Bhd (Aug 22, 2025)
(Calls by analysts tracked by Bloomberg: 3 Buy, 3 Hold, 0 Sell; Consensus target price: RM4.81)
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