3 days ago
- Business
- Malaysian Reserve
NexG stock downgraded to Sell, target price lowered to 45 sen
NexG Bhd is making its biggest sector leap, by acquiring 402m shares (32.6% equity) in Classita Holdings Bhd from Hong Seng Consolidated for RM60.3m, alongside 414.3m Classita warrants for RM16.5m. That is RM76.8m in total, partially funded by RM40m in borrowings, marking a rare move for the group into the property and construction space. We are Neutral on the deal's fundamentals as the near-term earnings impact is minimal, while long-term execution risk remains high given Classita's volatile track record. Nevertheless, the share price has rallied in recent months with much of the perceived upside highly likely has been priced in. Hence, we are downgrading our call from Hold to Sell, while keeping our target price at 45 sen based on 18x price to earnings ratio (PER) (+1 standard deviation above average 3-year forward PER) applied to FY26F diluted earnings per share of 2.5 sen. — BIMB Securities Sdn Bhd (Aug 11, 2025)
(Calls by analysts tracked by Bloomberg: 4 Buy, 0 Hold, 1 Sell; Consensus target price: 52 sen)
