MAG: Aquaculture Firm Exceeds Expectations, Poised for Sustained Growth

MAG Holdings Berhad recently reported its 15MFY25 financial results, which, despite a non-comparable reporting period due to an extended financial year, revealed performance broadly in line with expectations on a normalised 3-month run-rate basis. The company’s earnings tracked at 25% of its 12MFY26E forecasts, demonstrating solid operational execution.

Performance Review

On a year-over-year basis, MAG Holdings Berhad’s 15MFY25 revenue surged by 58.9% to RM464.2 million from RM292.2 million in 15MFY24. This significant increase primarily reflects the longer reporting period and higher sales volumes. While margins normalised from an elevated base in the prior period, the gross profit (GP) margin settled at 21.3% (from 26.2% in 15MFY24), and the EBITDA margin softened to 20.1% (from 26.4%). These shifts were largely due to a rise in the cost-of-sales and a higher operating expenditure (opex) margin. Despite these adjustments, overall margin performance remained broadly in line with the bank’s FY26 margin assumptions.

Quarterly Dynamics

Quarter-on-quarter, revenue saw an 8.9% decline against 4QFY25, attributed to softer trading activity, a trend observed historically in the company’s quarterly patterns. Gross profit margin contracted by 6 percentage points to 15.3%, however, the opex margin showed improvement, falling to 2.1% from 6.1% in 4QFY25, mainly due to the absence of non-recurring expenses incurred in the previous quarter. Despite this opex efficiency, a higher effective tax rate contributed to a slight easing of the net profit margin to 8.3% from 13.1%.

Future Outlook

The outlook for MAG Holdings Berhad remains positive, with expectations of sustained growth in its core aquaculture and food trading operations. This growth is anticipated to be driven by ongoing improvements in farming efficiency and productivity, including the adoption of advanced smart-farming technologies. The company also plans to enhance operational consistency and expand its market reach through continued marketing efforts and distributor expansion. Despite an uncertain external environment, MAG’s strategic efficiency initiatives and integrated operating model are expected to underpin steady financial performance into calendar year 2026.

Analyst Recommendation

Mercury Securities maintains a “BUY” recommendation for MAG Holdings Berhad, reiterating a target price of RM0.22. This valuation is based on a 9.5x PER applied to FY27E EPS of 2.3 sen. The investment bank views these valuations as undemanding, noting a 15% discount to the peers’ trailing PER average of 11.1x. Post-results, the bank revised FY25E topline and earnings higher by 45% to reflect the elongated 18-month financial period, while FY26E/FY27E forecasts remain unchanged, representing normalised 12-month operating cycles.