BMGREEN: Earnings Align with Expectations as Renewables Arm Ramps Up, Positive Outlook Ahead

A company’s recent financial results for the nine months ended FY26 (9MFY26) saw core earnings register MYR35.4m, an in-line performance that met internal expectations despite a slight year-on-year decline of 1.2%. The performance, however, fell short of the Street’s full-year estimates. Analysts view these results as largely within expectations, anticipating a gradual ramp-up in capacity from its newly acquired subsidiary, Plus Xnergy (PXH).

Performance Review

For the third quarter of FY26 (3QFY26), revenue softened by 2.8% year-on-year but showed a robust 14% quarter-on-quarter increase, reaching MYR149.9m. This contributed to a 9MFY26 revenue of MYR409m, a 6.6% year-on-year growth. The stronger revenue figures were primarily driven by the full-year consolidation of PXH’s numbers and ongoing progress in utility-scale projects under the Corporate Green Power Programme (CGPP). Despite the revenue growth, core earnings for 3QFY26 declined 11.6% year-on-year, though rising significantly by 54.4% quarter-on-quarter. The softer year-on-year earnings are mainly attributed to weaker margins within the solar segment.

Challenges and Mitigation

The solar segment recorded a MYR1.3m loss in 3QFY26, primarily due to the discontinuation of the Net Energy Metering (NEM) scheme in July 2025. This cessation mainly impacted the higher-margin residential solar segment, leading to lower operating volumes and consumers deferring installation decisions awaiting clarity on new scheme parameters. In response, the Group’s solar segment plans to intensify its focus on Battery Energy Storage Systems (BESS), aiming to introduce cost-saving solutions aligned with the new tariff structure. This strategic shift will enable customers to reduce peak demand charges and optimize overall energy expenditure.

Future Outlook

Performance is anticipated to improve in the coming quarters, buoyed by the upcoming rollout of the Solar Accelerated Transition Action Programme (ATAP). With PXH’s capacity ramping up and the execution of secured utility-scale projects, the Group expects an earnings recovery. Current earnings forecasts and the target price remain unchanged following these in-line results.

Investment Recommendation

Given the positive outlook on the company’s strategic adjustments and the expected recovery in its solar segment, the recommendation for the stock is BUY, reflecting confidence in its future growth trajectory.