Taliworks Betting On Air Selangor Projects
RHB Investment Bank Bhd (RHB Research) has reiterated its BUY call on Taliworks Corporation Bhd with a revised target price of RM1.01, up from RM0.98, projecting a 49% upside alongside a forecast dividend yield of around 7% for FY26. The valuation is supported by the counter's undemanding EV/EBITDA levels—currently two standard deviations below its five-year mean—and a domestic-centric business focus.
However, Taliworks' 1Q25 core profit of RM10.5 million, down 30% year-on-year, came in below expectations, representing just 12% of RHB's full-year forecast.
The research house attributed the earnings miss to weaker-than-anticipated metered water sales and slower construction progress at the Sungai Rasau water treatment plant. The project's first stage packages 2 and 3 have reached 24% and 11% completion respectively by end-1Q25, showing improvement from a year earlier, yet progress still lagged internal projections.
While RHB Research still expects project completion by 2027, annual construction momentum is now likely to be backloaded towards the final year, prompting downward revisions to progress billings for FY25 and FY26, though upward adjustments were made for FY27.
The water treatment and supply division saw a 5.4% decline in EBIT during the quarter due to Air Selangor's reallocation of surplus water from the southern to the northern region of Selangor. RHB has revised its earnings forecasts for FY25 to FY27 by -7%, -3%, and +3% respectively, incorporating more conservative assumptions for metered water sales under the new water distribution policy. This reassessment, along with a roll-forward of its valuation base year to FY26, contributed to the increase in the target price.
Highway operations, while seeing improved average daily traffic at Grand Saga and Grand Sepadu, were impacted by a 50% toll discount offered during festive periods and higher maintenance costs. The renewable energy segment posted flat EBIT as revenue gains were offset by reduced sundry income.
Meanwhile, the group's waste management associate posted deeper operating losses of RM7.7 million in 1Q25 compared to RM5.6 million a year earlier, due to softer profits from the associate's own operations.
Taliworks has not secured new construction contracts since December 2021, but RHB noted that Air Selangor's plans to build four new water treatment plants by 2030 may offer upside. Job wins from these projects, along with a faster-than-expected tariff hike for the group's waste management associate, could serve as rerating catalysts for the stock. Related
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Express
19 hours ago
- Daily Express
Life Water Berhad acquires Twinine
Published on: Friday, May 30, 2025 Published on: Fri, May 30, 2025 Text Size: Twinine recorded steady audited revenues of RM8.60 million in FY2022 and FY2023, and an unaudited RM8.50 million in FY2024, with a three-year average profit after tax (PAT) of RM0.91 million. Kota Kinabalu: Life Water Berhad, one of Sabah's leading beverage manufacturers, is taking a major leap beyond its core business with the RM10.5 million acquisition of Twinine Sdn Bhd, a seasoned player in the sauces and condiments market. Life Water Managing Director Liaw Hen Kong, said the move marks a significant milestone in Life Water's diversification strategy, while its core drinking water segment is set to grow by 40 percent with new production capacity coming online by the end of 2025. 'The acquisition was formalized via a Share Sale Agreement (SSA) to acquire 100 percent equity interest in Twinine, a company with over 35 years of experience and market presence across Sabah's West Coast, parts of Sarawak and Brunei,' he said in a statement. He said Twinine recorded steady audited revenues of RM8.60 million in FY2022 and FY2023, and an unaudited RM8.50 million in FY2024, with a three-year average profit after tax (PAT) of RM0.91 million. 'This is a strategic step forward in expanding our presence within the broader FMCG space. 'Twinine's product line complements our distribution capabilities, and we see clear potential to accelerate growth through cross-branding and tapping into shared consumer segments. We're particularly excited about bringing their products deeper into the East Coast of Sabah, where our existing network gives us a strong foothold,' he added. Advertisement As part of its integration plan, he said, the company will introduce dual-shift operations at Twinine's existing facility to boost production. 'The Group is also exploring the establishment of a new manufacturing site at the Kota Kinabalu Industrial Park to support long-term growth in the condiments category. Twinine's founder will remain on board for two years to guide the transition and help drive expansion plans,' Liaw said. The acquisition is expected to enhance group earnings and accelerate Life Water's entry into new consumer markets under its broader fast-moving consumer goods (FMCG) strategy. The company also revealed that its core drinking water operations are on track for a 40 percent capacity increase by the end of 2025. Liaw said The Group's new Keningau plant, operational since early this year, has already added 59 million liters of annual production, pushing total capacity to 448 million liters per annum. Further expansion is underway at the Sandakan Sibuga Plant 1, where a new manufacturing line is being commissioned and expected to be completed in the second half of 2025. 'This will add another 178 million liters of annual capacity, raising the Group's total production to 626 million liters—a 40 percent increase compared to current levels,' he said. The company also announced its financial performance for the third quarter ended 31 March 2025 (Q3FY25), reporting RM43.12 million in revenue—up 0.95 percent from the previous quarter—driven by seasonal demand for carbonated and fruit beverages. Liaw emphasised that the drinking water segment remained the largest contributor, accounting for 82.6 percent of revenue. The Group achieved a gross profit (GP) of RM19.52 million with a GP margin of 45.3 percent, while profit before tax (PBT) was RM8.11 million and PAT stood at RM6.48 million. Margins slightly moderated due to the implementation of the minimum wage policy and temporary inefficiencies linked to expansion. For the nine-month period ended March 31, Life Water recorded RM128.42 million in revenue and RM20.97 million in PAT, maintaining a solid PAT margin of 16.3 percent. With a two-pronged strategy of organic growth and strategic diversification, Life Water is positioning itself as a rising multi-category FMCG player in East Malaysia. The Twinine acquisition enhances its product offerings and opens new growth channels, while the expanded production footprint ensures continued leadership in the bottled water space. Liaw said, as consumer demand evolves and competition intensifies, Life Water remains optimistic about its growth trajectory for FY2025 and beyond. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
New Straits Times
2 days ago
- New Straits Times
CIMB's Q1 net profit rises to RM1.97bil on RM5.5bil revenue
KUALA LUMPUR: CIMB Group Holdings Bhd recorded a higher net profit of RM1.97 billion for the first quarter ended March 31, 2025, up from RM1.94 billion in the same period last year, supported by stronger net interest income (NII). Its revenue slipped slightly to RM5.5 billion from RM5.6 billion in the same period last year, mainly due to compressed net interest margins (NIM). However, this was cushioned by growth in assets. CIMB's NII saw a slight increase both quarter-on-quarter (QoQ) and year-on-year (YoY) to RM3.82 billion. Meanwhile, its non-interest income (NOII) rose 11.1 per cent QoQ, supported by an 18.9 per cent jump in treasury client sales and a 12.6 per cent rise in fee and commission income. In a filing with Bursa Malaysia, the banking group said it remains committed to implementing its Forward30 strategic plan, focusing on customer-centric initiatives, enhancing operational efficiency, and promoting sustainable banking practices. "During the quarter, CIMB transitioned its leadership in Thailand and Cambodia, and have included Thailand, Cambodia and Singapore as part of the group's growth markets to sharpen strategic focus and drive growth in priority segments. "In the medium term, CIMB believes the evolving global landscape will continue to present new opportunities, particularly in intra-Asean trade, where the Group's integrated Asean franchise is poised to seize growth prospects," it added. CIMB stated that it is well-equipped to manage ongoing market volatility, thanks to its limited exposure to trade-related financing and clients heavily reliant on exports to the US. Group chief executive officer Novan Amirudin said CIMB's first-quarter results reflect the resilience of its diversified Asean portfolio, with solid performance across various income streams, especially client franchise income, which has been steadily growing since 2022. "We have maintained healthy asset quality and exercised disciplined cost controls to enhance resilience amid a dynamic operating environment. "In an increasingly uncertain market condition, we remain committed to being a reliable and trusted partner for our customers. Novan said the group's strong focus on prudent risk management and operational discipline has positioned it well to support its clients, maintain stability and create value for shareholders. "With disciplined execution of our Forward30 strategic plan, we are confident in our ability to deliver both short- and long-term targets, backed by the strength of our franchise. "We will remain disciplined and proactive with capital optimisation, including returning excess capital to our shareholders as we have demonstrated over the last two years," he added.
The Star
2 days ago
- The Star
Gabungan AQRS poised for rebound on potential job wins
PETALING JAYA: Gabungan AQRS Bhd is expected to see improved earnings ahead, supported by the rollout of major infrastructure and property projects, following weaker results for the nine months ended March 31, 2025 (9M25). According to RHB Research, the group could benefit from potential job wins linked to the reinstatement of five Light Rail Transit 3 stations, due to its prior experience working on the Shah Alam Stadium and Glenmarie stations. It is also poised to gain from Phase 1B of the Pan Borneo Highway in Sabah, where its 49%-owned SEDCO Precast Sdn Bhd is a contender to supply precast components worth an estimated RM400mil to RM500mil. The formation of new property joint ventures, such as the Serena Gambang project in Pahang, may further boost earnings. RHB Research noted that, as of today, the group has an outstanding construction order book of RM335mil, which the research house described as 'reasonable at this juncture, as job awards have yet to pick up.' Meanwhile, its Johor Baru development, The Peak, may gain traction due to its proximity to the Johor Baru–Singapore Rapid Transit System Link station. The group has unbilled property sales of RM191mil. In the third quarter of financial year ending June 30, 2025 (3Q25), Gabungan AQRS posted a net loss of RM7.88mil, or a basic loss per share of 1.45 sen. This compared with a net profit of RM3.18mil, or a basic earnings per share of 0.58 sen, in the same quarter last year. Revenue also dropped from RM66.96mil to RM41.08mil during the quarter. For 9M25, the group recorded a net loss of RM16.13mil, compared to a net profit of RM16.91mil in the same period last year. Revenue also dipped from RM376.05mil to RM151.31mil. The negative deviation was due to a weaker-than-expected property division and higher-than-estimated sales costs. While Gabungan AQRS' results missed the research house's forecasts, they exceeded street expectations, accounting for 56% and 115% of the respective full-year projections. Following the results, RHB Research trimmed its FY25 to FY27 earnings forecasts by 14%, 10% and 13%, factoring in slower property revenue recognition and more conservative cost assumptions. 'We also take the opportunity to ascribe a lower target price-to-earnings (PE) (ratio) of eight times, as Gabungan AQRS' remaining orders have not been replenished at the same pace as that of peers,' it added. Nonetheless, RHB Research maintained a 'buy' call on the group, with a revised target price of 33 sen. 'Given the plethora of catalysts and its track record in infrastructure projects like Mass Rapid Transit 1 and Sungai Besi-Ulu Klang Elevated Expressway, the stock remains undervalued relative to peers, trading more than two standard deviations below its five-year mean PE – which justifies our firm 'buy' call,' it added.
