30 July 2025
Bursa Malaysia (BURSA MK): Expecting a Rebound Ahead
- Maintain NEUTRAL and MYR8.05 TP, 5% upside. Bursa Malaysia’s 1H25 results came in line with our, but narrowly missed Street expectations. While soft market sentiment was a dampener on 1H25 securities average daily value (SADV), management expects a rebound ahead, and retained its full-year PBT target. Other headline KPIs were also left unchanged.
- Results review. BURSA’s 2Q25 net profit of MYR57.1m (-29% YoY, -17% QoQ) brought the 1H25 sum to MYR125.5m (-19% YoY) – this formed 48% and 46% of our and consensus full-year estimates. As expected, 1H25 total revenue dipped 8% YoY after a sequentially weaker showing in 2Q25 due to QoQ softness in both the securities and derivatives markets. Opex was also up QoQ in 2Q25 largely due to higher staff costs, leading to a higher 2Q25 CIR of 56% (1Q25: 50%, 1H25: 53%). BURSA declared an interim DPS of 14 sen or a 90% payout (1H24: 18 sen DPS, 94% payout), which also met our expectations.
- Impacted by soft market sentiment. BURSA’s 2Q25 SADV of MYR2.4bn was a 15% QoQ decline (YoY: -39%), likely due to increased risk-off sentiment following US President Donald Trump’s Liberation Day announcement in early April. That said, management expects an equity market rebound in 2H25 as trade uncertainties dissipate, while a more accommodative global monetary policy environment and undemanding valuations of local equities could also attract investors into the Malaysian market. As such, management retained its full-year PBT target of MYR369-408m despite the 1H25 print of MYR167m tracking below that range.
- Briefing highlights. In 2H25, BURSA’s priorities include enhancing market vibrancy by deploying market development initiatives (eg Vibrancy Initiative Programme) and intensifying measures to raise corporate performance (eg improving corporate visibility). On the derivatives front, the exchange is also committed to growing equity-based products with smaller contract sizes to improve accessibility especially towards retail investors. Elsewhere, BURSA expects to incur a full-year CIR of 53% (ie flat from 1H25 level) as it continues to spend on headcount for new businesses and capacity building on top of IT upgrades. Lastly, we do not expect BURSA to pay out another special dividend in FY25, partly as the group will likely require a higher degree of cash preservation for its core system replacement scheduled for 2026 – the amount for this has yet to be quantified.
- No changes to our forecasts and TP as results were in line. Our TP, based on an unchanged 22.5x P/E (near the long-term mean), includes a 6% ESG premium.
Neutral
(Maintained)
Target Price (Return): MYR8.05 (+5%)
Price (Market Cap): MYR7.66 (USD1,465m)
ESG score: 3.3 (out of 4)
Avg Daily Turnover (MYR/USD) 8.69m/2.07m
Analysts
Nabil Thoo
+603 2302 8123
nabil.thoo@rhbgroup.com
David Chong CFA
+603 2302 8106
david.chongvc@rhbgroup.com
Share Performance (%)
| YTD | 1m | 3m | 6m | 12m | |
|---|---|---|---|---|---|
| Absolute | (14.5) | 0.4 | 2.1 | (7.8) | (22.9) |
| Relative | (7.6) | 0.3 | 1.2 | (6.3) | (17.0) |
52-wk Price low/high (MYR) 7.28 – 9.85
Forecasts and Valuation
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover (MYRm) | 616 | 784 | 736 | 761 | 806 |
| Recurring net profit (MYRm) | 231 | 310 | 261 | 273 | 287 |
| Recurring net profit growth (%) | 1.8 | 34.4 | (15.8) | 4.7 | 4.8 |
| Recurring P/E (x) | 26.87 | 19.99 | 23.74 | 22.67 | 21.62 |
| P/B (x) | 7.5 | 7.1 | 6.9 | 6.7 | 6.5 |
| P/CF (x) | 29.31 | 18.47 | 25.10 | 21.79 | 20.69 |
| Dividend Yield (%) | 3.8 | 5.7 | 3.8 | 4.0 | 4.2 |
| EV/EBITDA (x) | 17.46 | 12.64 | 14.52 | 13.84 | 13.07 |
| Return on average equity (%) | 31.4 | 36.6 | 29.4 | 29.9 | 30.4 |
| Net debt to equity (%) | net cash | net cash | net cash | net cash | net cash |
Overall ESG Score: 3.3 (out of 4)
E Score: 3.0 (GOOD)
S Score: 3.0 (GOOD)
G Score: 4.0 (EXCELLENT)
Please refer to the ESG analysis on the next page
Emissions And ESG
Trend analysis
Including offsets from purchase of renewable energy certificates, total emissions for 2024 would have been 2,257 tCO2e (2023: 3,634 tCO2e).
| Emissions (tCO2e) | Dec-22 | Dec-23 | Dec-24 | Dec-25 |
|---|---|---|---|---|
| Scope 1 | 195 | 2,409 | 1,348 | na |
| Scope 2 | 7,217 | 6,169 | 5,664 | na |
| Scope 3 | 1,533 | 1,224 | 909 | na |
| Total emissions | 8,944 | 9,802 | 7,921 | na |
Latest ESG-Related Developments
Inter-regional ESG-linked ecosystem: BURSA will collaborate with the stock exchanges of Indonesia and Thailand to establish an ESG-linked ecosystem with the aim of offering cross-border ESG investments opportunities, among others.
New ESG reporting platform: In Dec 2023, BURSA launched the Bursa Malaysia ESG Reporting Platform, a repository for ESG-related disclosures of public-listed companies in line with the enhanced sustainability reporting requirements.
First domestically-produced carbon credits auctioned: On 25 Jul 2024, BURSA through the Bursa Carbon Exchange auctioned Malaysia’s first domestic carbon credits, originating from the Kuamut Rainforest Conservation Project in Sabah.
ESG Unbundled
Overall ESG Score: 3.3 (out of 4)
Last Updated: 29 April 2025
E Score: 3.0 (GOOD)
Bursa Malaysia participated in the joint committee on climate change (JC3), an initiative led by the Securities Commission Malaysia and Bank Negara Malaysia to promote the transition to a low-carbon economy. It has also set up a climate action task force to coordinate efforts to improve its environmental performance and reporting.
S Score: 3.0 (GOOD)
As the country’s sole stock exchange, it acts as a regulator to ensure a fair and orderly market for all participants. In addition, it has been exerting influence over listed companies to make better disclosures on ESG related issues, encapsulated in the Enhanced Sustainability Reporting Requirements published on 26 Sep 2022.
G Score: 4.0 (EXCELLENT)
10 out of 11 of Bursa Malaysia’s board members are independent and non-executive. The group also has exemplary gender and racial diversity at the board and senior management levels. The company’s FTSE4Good Bursa Malaysia series of indices provides investors with greater visibility on listed companies with the best ESG practices in Malaysia.
ESG Rating History
Financial Exhibits
Valuation basis
We use 22.5x FY26F P/E (near the mean) to value Bursa Malaysia.
Key drivers
Our earnings estimates are most sensitive to:
i. SADV assumptions;
ii. Clearing fee rate; and
iii. Daily derivative contracts traded.
Key risks
Key downside risks to our call include:
i. Lower-than-expected SADV;
ii. Lower-than-expected clearing rate; and
iii. Equity market crash.
Company Profile
Bursa Malaysia is an exchange holding company incorporated in 1976 and listed in 2005. One of the largest bourses in ASEAN, Bursa Malaysia helps over 900 companies raise capital across 50 economic activities – whether through the Main Market for established large-cap companies, the ACE Market for emerging companies of all sizes, or the LEAP Market for up-and-coming SME companies.
Financial summary (MYR)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring EPS | 0.29 | 0.38 | 0.32 | 0.34 | 0.35 |
| DPS | 0.29 | 0.44 | 0.29 | 0.30 | 0.32 |
| BVPS | 1.02 | 1.08 | 1.11 | 1.15 | 1.18 |
| Return on average equity (%) | 31.4 | 36.6 | 29.4 | 29.9 | 30.4 |
Valuation metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring P/E (x) | 26.87 | 19.99 | 23.74 | 22.67 | 21.62 |
| P/B (x) | 7.5 | 7.1 | 6.9 | 6.7 | 6.5 |
| FCF Yield (%) | 2.8 | 4.9 | 3.3 | 4.1 | 4.3 |
| Dividend Yield (%) | 3.8 | 5.7 | 3.8 | 4.0 | 4.2 |
| EV/EBITDA (x) | 17.46 | 12.64 | 14.52 | 13.84 | 13.07 |
| EV/EBIT (x) | 19.44 | 13.73 | 15.98 | 15.16 | 14.36 |
Income statement (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover | 616 | 784 | 736 | 761 | 806 |
| Gross profit | 616 | 784 | 736 | 761 | 806 |
| EBITDA | 328 | 446 | 389 | 406 | 426 |
| Depreciation and amortisation | (33) | (35) | (35) | (35) | (38) |
| Operating profit | 294 | 411 | 353 | 370 | 388 |
| Net interest | (1) | (1) | (1) | (1) | (1) |
| Pre-tax profit | 321 | 410 | 353 | 370 | 387 |
| Taxation | (70) | (102) | (92) | (96) | (101) |
| Reported net profit | 252 | 310 | 261 | 273 | 287 |
| Recurring net profit | 231 | 310 | 261 | 273 | 287 |
Cash flow (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Change in working capital | (13) | 15 | (26) | 3 | 5 |
| Cash flow from operations | 211 | 336 | 247 | 285 | 300 |
| Capex | (36) | (34) | (40) | (30) | (30) |
| Cash flow from investing activities | (33) | (77) | (27) | (14) | (11) |
| Dividends paid | (214) | (259) | (235) | (246) | (258) |
| Cash flow from financing activities | (212) | (253) | (235) | (246) | (258) |
| Cash at beginning of period | 395 | 361 | 367 | 352 | 376 |
| Net change in cash | (34) | 6 | (15) | 24 | 30 |
| Ending balance cash | 361 | 367 | 352 | 376 | 407 |
Balance sheet (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total cash and equivalents | 424 | 496 | 481 | 505 | 535 |
| Tangible fixed assets | 202 | 195 | 219 | 214 | 206 |
| Total investments | 55 | 66 | 76 | 86 | 96 |
| Total assets | 3,282 | 4,355 | 4,157 | 4,284 | 4,505 |
| Total liabilities | 2,457 | 3,479 | 3,254 | 3,354 | 3,547 |
| Total equity | 825 | 876 | 902 | 930 | 958 |
| Total liabilities & equity | 3,282 | 4,355 | 4,157 | 4,284 | 4,505 |
Key metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Revenue growth (%) | 2.2 | 27.2 | (6.1) | 3.4 | 5.9 |
| Recurrent EPS growth (%) | 1.8 | 34.4 | (15.8) | 4.7 | 4.8 |
| Gross margin (%) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
| Operating EBITDA margin (%) | 53.1 | 56.9 | 52.8 | 53.3 | 52.9 |
| Net profit margin (%) | 40.9 | 39.5 | 35.5 | 35.9 | 35.6 |
| Dividend payout ratio (%) | 93.0 | 114.8 | 90.0 | 90.0 | 90.0 |
| Capex/sales (%) | 5.9 | 4.3 | 5.4 | 3.9 | 3.7 |
| Interest cover (x) | 552 | 772 | 642 | 673 | 705 |
Results At a Glance
Figure 1: 2Q25 and 1H25 results summary
| FYE Dec (MYRm) | 2Q24 | 1Q25 | 2Q25 | YoY (%) | QoQ (%) | 1H24 | 1H25 | YoY (%) | Comments |
|---|---|---|---|---|---|---|---|---|---|
| Operating revenue | 194 | 178 | 167 | (14) | (6) | 375 | 344 | (8) | |
| – Securities trading | 105 | 77 | 70 | (34) | (9) | 192 | 146 | (24) | In tandem with the lower SADV (-27% YoY) |
| – Derivatives trading | 27 | 29 | 27 | 3 | (6) | 52 | 56 | 8 | In tandem with the higher DADC (+14% YoY) |
| – BSAS | 5 | 6 | 5 | 4 | (16) | 9 | 10 | 16 | |
| – Other stable revenue | 58 | 66 | 65 | 12 | (2) | 121 | 132 | 8 | Of these, BURSA’s market data business grew 6% YoY in 1H25 |
| Other income | 6 | 7 | 6 | (3) | (12) | 13 | 13 | (0) | |
| Total revenue | 200 | 184 | 173 | (14) | (6) | 387 | 357 | (8) | |
| Operating expenses | (91) | (93) | (96) | 7 | 4 | (178) | (189) | 7 | Management’s full-year CIR guidance is 53% for FY25F |
| EBIT | 109 | 92 | 76 | (30) | (17) | 210 | 168 | (20) | |
| EBITDA | 118 | 101 | 85 | (28) | (15) | 227 | 186 | (18) | |
| Other income/(expenses) | (0) | (0) | (0) | 0 | 0 | (0) | (0) | 0 | |
| PBT | 109 | 91 | 76 | (30) | (17) | 209 | 167 | (20) | 1H25 PBT is tracking below management’s MYR369-408m target, which was kept unchanged |
| Tax expense | (29) | (23) | (19) | (32) | (17) | (54) | (43) | (21) | |
| – ETR (%) | 0 | 0 | 0 | 0 | 0 | ||||
| PAT | 81 | 68 | 57 | (30) | (17) | 155 | 124 | (20) | |
| Minority interest | (0) | 0 | 1 | 1 | 1 | ||||
| PATAMI | 80 | 68 | 57 | (29) | (17) | 155 | 125 | (19) | Forms 48%/46% of our/consensus full-year FY25F net profit |
Other key data and ratios
| SADV (MYRm) | Velocity (%) | Effective clearing rate (bps) | Trading days | End-period KLCI (ppts) | End-period market cap (MYRbn) | Average daily no of contracts – derivatives | Number of IPOs | Comments | |
|---|---|---|---|---|---|---|---|---|---|
| 1H25 | 2,580 | 32 | 2 | 118 | 1,533 | 1,904 | 96,913 | 32 | On track to meet management’s target of 60 IPOs in 2025. Management also has a target IPO market cap of MYR40.2bn (1H25: MYR17.4bn), which assumes a sizeable listing (MYR15bn market cap) in 2H25 |
| 1H24 | 3,540 | 42 | 3 | 119 | 1,590 | 2,028 | 84,927 | 21 |
Market Performance & Outlook
Figure 6: BURSA maintains a cautiously optimistic stance on its ability to achieve its full-year PBT target
Financial – Profit Before Tax (PBT)
Target:
RM369 mil to RM408 mil
Non-Trading Revenue (NTR)
Target:
Growth rate of 5%-7% from FY2024
Non-Financial – IPOS & IPO Market Capitalisation
Target:
60 IPOs & RM40.2 bil in total IPO Market Cap*
Non-Financial – Reduction in Organisation’s Carbon Footprint
Target:
Reduction of 10% of Scope 1 & 2 emissions from FY2022
*Total IPO Market Cap target for 2025 assumes a potential sizeable IPO listing with market capitalisation of RM15.0 billion.
Sensitivity Analysis
Figure 7: BURSA’s FY26F earnings sensitivity to changes in SADV and ADC
| SADV (MYRm) | 80,000 | 85,000 | 90,000 | 95,000 | 98,646 | 100,000 | 105,000 | 110,000 | 115,000 |
|---|---|---|---|---|---|---|---|---|---|
| 2,200 | 210 | 213 | 217 | 221 | 224 | 225 | 229 | 232 | 236 |
| 2,400 | 225 | 229 | 232 | 236 | 239 | 240 | 244 | 247 | 251 |
| 2,600 | 240 | 244 | 247 | 251 | 254 | 255 | 259 | 262 | 266 |
| 2,800 | 255 | 259 | 262 | 266 | 269 | 270 | 274 | 277 | 281 |
| 2,860 | 259 | 263 | 267 | 271 | 273 | 274 | 278 | 282 | 286 |
| 3,000 | 270 | 274 | 277 | 281 | 284 | 285 | 289 | 292 | 296 |
| 3,200 | 285 | 289 | 292 | 296 | 299 | 300 | 304 | 308 | 311 |
| 3,400 | 300 | 304 | 308 | 311 | 314 | 315 | 319 | 323 | 326 |
| 3,600 | 315 | 319 | 323 | 326 | 329 | 330 | 334 | 338 | 341 |
Figure 8: BURSA’s TP sensitivity
| SADV (MYRm) | 80,000 | 85,000 | 90,000 | 95,000 | 98,646 | 100,000 | 105,000 | 110,000 | 115,000 |
|---|---|---|---|---|---|---|---|---|---|
| 2,200 | 6.20 | 6.30 | 6.40 | 6.50 | 6.60 | 6.60 | 6.75 | 6.85 | 6.95 |
| 2,400 | 6.60 | 6.75 | 6.85 | 6.95 | 7.05 | 7.05 | 7.20 | 7.30 | 7.40 |
| 2,600 | 7.05 | 7.20 | 7.30 | 7.40 | 7.50 | 7.50 | 7.60 | 7.75 | 7.85 |
| 2,800 | 7.50 | 7.60 | 7.75 | 7.85 | 7.90 | 7.95 | 8.05 | 8.20 | 8.30 |
| 2,860 | 7.65 | 7.75 | 7.85 | 8.00 | 8.05 | 8.10 | 8.20 | 8.30 | 8.40 |
| 3,000 | 7.95 | 8.05 | 8.20 | 8.30 | 8.35 | 8.40 | 8.50 | 8.60 | 8.75 |
| 3,200 | 8.40 | 8.50 | 8.60 | 8.75 | 8.80 | 8.85 | 8.95 | 9.05 | 9.15 |
| 3,400 | 8.85 | 8.95 | 9.05 | 9.15 | 9.25 | 9.30 | 9.40 | 9.50 | 9.60 |
| 3,600 | 9.30 | 9.40 | 9.50 | 9.60 | 9.70 | 9.75 | 9.85 | 9.95 | 10.05 |
Recommendation Chart
| Date | Recommendation | Target Price | Price |
|---|---|---|---|
| 2025-07-22 | Neutral | 8.1 | 7.6 |
| 2025-04-28 | Neutral | 7.8 | 7.6 |
| 2025-01-27 | Neutral | 8.8 | 8.5 |
| 2025-01-15 | Neutral | 8.8 | 8.4 |
| 2024-10-31 | Neutral | 9.7 | 9.0 |
| 2024-07-30 | Buy | 11.3 | 9.8 |
| 2024-07-22 | Buy | 11.3 | 10.0 |
| 2024-05-20 | Buy | 9.9 | 8.3 |
| 2024-05-02 | Neutral | 8.0 | 7.6 |
| 2024-04-23 | Neutral | 7.9 | 7.5 |
| 2024-02-01 | Neutral | 7.9 | 7.5 |
| 2024-01-16 | Buy | 8.1 | 7.4 |
| 2023-10-31 | Buy | 7.6 | 6.8 |
| 2023-10-19 | Buy | 7.5 | 6.7 |
| 2023-07-31 | Buy | 7.5 | 6.7 |
RHB Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
Investment Research Disclaimers
RHB has issued this report for information purposes only… [Full disclaimer text from page 8 and 9 would be inserted here, broken into paragraphs and sections as in the original document.]
RESTRICTIONS ON DISTRIBUTION
Malaysia
This report is issued and distributed in Malaysia by RHB Investment Bank Berhad (“RHBIB”). …
Indonesia
This report is issued and distributed in Indonesia by PT RHB Sekuritas Indonesia. …
Singapore
This report is issued and distributed in Singapore by RHB Bank Berhad (through its Singapore branch) …
United States
This report was prepared by RHB is meant for distribution solely and directly to “major” U.S. institutional investors…
DISCLOSURE OF CONFLICTS OF INTEREST
RHB Investment Bank Berhad, its subsidiaries (including its regional offices) and associated companies, (“RHBIB Group”) form a diversified financial group…[Full disclosure text from page 9 would be inserted here.]
