PUBLIC INVESTMENT BANK
PublicInvest Research Company Update
Wednesday, August 13, 2025
MGB BERHAD
Outperform
DESCRIPTION
A construction company with presence in Saudi Arabia, specialised in building affordable housing and involved in property development.
| 12-month Target Price | RM1.00 |
| Current Price | RM0.50 |
| Expected Return | 100.0% |
| Previous Target Price | RM1.00 |
| Market | MAIN |
| Sector | Construction |
| Bursa Code | 7595 |
| Bloomberg Ticker | MLG MK |
| Shariah-compliant | Yes |
SHARE PRICE CHART
Share price chart data from Mar-25 to Aug-25 indicates a fluctuating trend, ending around 0.50.
| 52 Week Range (RM) | 0.50 – 0.91 |
| 3-Month Average Vol (‘000) | 139.8 |
SHARE PRICE PERFORMANCE
| 1M | 3M | 6M | |
|---|---|---|---|
| Absolute Returns | -8.2 | -16.4 | -24.7 |
| Relative Returns | -12.5 | -18.6 | -27.5 |
KEY STOCK DATA
| Market Capitalisation (RMm) | 295.8 |
| No. of Shares (m) | 591.7 |
MAJOR SHAREHOLDERS
| LBS Bina Group | 57.8 % |
| Chek Lim Lit | 13.3 % |
| Kenanga Growth Fund | 2.0 % |
Secures RM185.9m Apartment Job in Johor
MGB secured a high-rise construction job from CI Medini SB with contract value of RM185.9m. The contract involves the construction of 2 blocks of service apartment, along with a seven-storey podium car park with facilities on the eight floors, which to be completed in two phases. This project is expected to contribute approximately 4.7% per annum on average to the Group’s earnings over the 27-month contract period. All told, we keep our earnings forecast unchanged, as this makes up a part of our FY25 job replenishment target of RM600m. We maintain our Outperform call, with an unchanged SOTP derived TP of RM1.00.
The contract worth RM185.9m was awarded to by CI Medini SB. It involves the construction of two blocks of service apartments, along with a seven-storey podium car park and facilities on the eight floors, to be completed in two phases. The first phase is set to commence in September 2025, while second phase is expected to begin in mid-2026, with both phases targeted for completion by end-2027.
With this job win, the Group’s orderbook is estimated to have reached RM1.2bn, providing earnings visibility for the next 2-3 years. Our projections indicate this job will contribute approximately 4.7% per annum on average, from FY25F to FY27F, assuming a high single-digit profit margins.
The Group continues to priorities building affordable homes by leveraging innovation, technological advancements, and improvement in its construction processes. Additionally, it aims to secure new government projects and expand its capabilities in the industrial sector. In the near term, potential growth drivers include the development of Kertih Terengganu Industrial Park and a joint venture in Saudi Arabia to gain traction.
| FY Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F | CAGR |
|---|---|---|---|---|---|---|
| Revenue | 971.8 | 1,032.0 | 1,319.0 | 1,361.6 | 1,402.4 | 13.0% |
| Gross Profit | 148.6 | 172.2 | 182.0 | 187.9 | 224.4 | 10.9% |
| Pre-tax Profit | 69.2 | 87.1 | 86.3 | 92.0 | 108.8 | 12.0% |
| Net Profit | 48.2 | 60.1 | 63.3 | 67.6 | 76.7 | 12.3% |
| Core Net Profit | 49.1 | 56.8 | 63.3 | 67.6 | 76.7 | 11.8% |
| Core EPS (Sen) | 8.3 | 9.6 | 10.7 | 11.4 | 13.0 | |
| P/E (x) | 8.6 | 6.9 | 6.5 | 6.1 | 5.4 | |
| DPS (Sen) | 1.6 | 3.0 | 3.2 | 3.4 | 3.9 | |
| Dividend Yield (%) | 2.3 | 4.4 | 4.6 | 4.9 | 5.6 |
Source: Company, PublicInvest Research estimate
T 603 2268 3010
F 603 2268 3014
E oh.boonyeow@publicinvestbank.com.my
INCOME STATEMENT DATA
| FY Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Revenue | 971.8 | 1,032.0 | 1,319.0 | 1,361.6 | 1,402.4 |
| Gross Profit | 148.6 | 172.2 | 182.0 | 187.9 | 224.4 |
| Operating Expenses | -73.5 | -79.6 | -89.8 | -90.0 | -105.8 |
| Operating Profit | 75.1 | 92.7 | 92.2 | 97.9 | 118.6 |
| Finance Cost | -6.1 | -6.1 | -6.1 | -6.1 | -10.0 |
| Pre-tax Profit | 69.2 | 87.1 | 86.3 | 92.0 | 108.8 |
| Income Tax | -18.7 | -25.5 | -20.7 | -22.1 | -26.1 |
| Effective Tax Rate (%) | 27.1 | 29.2 | 24.0 | 24.0 | 24.0 |
| Minorities | 2.3 | 1.6 | 2.3 | 2.3 | 6.0 |
| Net Profit | 48.2 | 60.1 | 63.3 | 67.6 | 76.7 |
| Core Net Profit | 49.1 | 56.8 | 63.3 | 67.6 | 76.7 |
Growth
| Revenue (%) | Gross Profit (%) | Operating Profit (%) | Core Net Profit (%) | |
|---|---|---|---|---|
| 58.6 | 6.2 | 27.8 | 3.2 | 3.0 |
| 67.5 | 15.9 | 5.7 | 3.2 | 19.4 |
| >100.0 | 23.4 | -0.5 | 6.2 | 21.1 |
| >100.0 | 15.5 | 11.5 | 6.9 | 13.4 |
Source: Company, PublicInvest Research estimates
BALANCE SHEET DATA
| FY Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Property, Plant & Equipment | 34.1 | 34.9 | 51.7 | 54.9 | 56.5 |
| Receivables | 70.2 | 125.9 | 160.4 | 179.0 | 184.4 |
| Cash at bank | 52.6 | 130.9 | 164.3 | 187.3 | 192.9 |
| Other assets | 966.2 | 868.7 | 900.4 | 908.2 | 935.5 |
| Total Assets | 1,123.0 | 1,160.5 | 1,276.8 | 1,329.4 | 1,369.3 |
| Loans and borrowings | 68.7 | 97.8 | 129.9 | 120.0 | 123.6 |
| Payables | 377.9 | 344.4 | 377.9 | 389.8 | 401.5 |
| Other liabilities | 121.9 | 121.6 | 127.9 | 131.1 | 101.9 |
| Total Liabilities | 568.5 | 563.7 | 635.7 | 640.9 | 627.0 |
| Shareholders’ Equity & Minority | 554.5 | 596.8 | 641.1 | 688.6 | 742.4 |
| Total Equity and Liabilities | 1,123.0 | 1,160.5 | 1,276.8 | 1,329.4 | 1,369.3 |
Source: Company, PublicInvest Research estimates
PER SHARE DATA & RATIOS
| FY Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Book Value Per Share (RM) | 0.9 | 1.0 | 1.1 | 1.2 | 1.3 |
| NTA Per Share (RM) | 0.5 | 0.6 | 0.7 | 0.7 | 0.8 |
| Core EPS (Sen) | 8.1 | 10.2 | 10.7 | 11.4 | 13.0 |
| DPS (Sen) | 1.6 | 3.0 | 3.2 | 3.4 | 3.9 |
| Payout Ratio (%) | 19.7 | 31.8 | 30.0 | 30.0 | 30.0 |
| ROA (%) | 4.4 | 4.9 | 5.0 | 5.1 | 5.6 |
| ROE (%) | 8.9 | 9.5 | 9.9 | 9.8 | 10.3 |
Source: Company, PublicInvest Research estimates
RATING CLASSIFICATION
STOCKS
SECTOR
DISCLAIMER
This document has been prepared solely for information and private circulation only. It is for distribution under such circumstances as may be permitted by applicable law. The information contained herein is prepared from data and sources believed to be reliable at the time of issue of this document. The views/opinions expressed herein are subject to change without notice and solely reflects the personal views of the analyst(s) acting in his/her capacity as employee of Public Investment Bank Berhad (“PIVB”). PIVB does not make any guarantee, representations or warranty neither expressed or implied nor accepts any responsibility or liability as to its fairness liability adequacy, completeness or correctness of any such information and opinion contained herein. No reliance upon such statement or usage by the addressee/anyone shall give rise to any claim/liability for loss of damage against PIVB, Public Bank Berhad, its affiliates and related companies, directors, officers, connected persons/employees, associates or agents.
This document is not and should not be construed or considered as an offer, recommendation, invitation or a solicitation of an offer to purchase or subscribe or sell any securities, related investments or financial instruments. Any recommendation in this document does not have regards to the specific investment objectives, financial situation, risk profile and particular needs of any specific persons who receive it. We encourage the addressee of this document to independently evaluate the merits of the information contained herein, consider their own investment objectives, financial situation, particular needs, risks and legal profiles, seek the advice of their, amongst others, tax, accounting, legal, business professionals and financial advisers before participating in any transaction in respect of any of the securities of the company (ies) covered in this document.
PIVB, Public Bank Berhad, our affiliates and related companies, directors, officers, connected persons/employees, associates or agents may own or have positions in the securities of the company(ies) covered in this document or any securities related thereto and may from time to time add or dispose of, or may be materially interested in, any such securities. Further PIVB, Public Bank Berhad, our affiliates and related companies, associates or agents do and/or seek to do business with the company(ies) covered in this document and may from time to time act as market maker or have assumed an underwriting commitment in the securities of such company(ies), may sell them or buy them from customers on a principal basis, may have or intend to accommodate credit facilities or other banking services and may also perform or seek to perform investment banking, advisory or underwriting services for or relating to such company(ies) as well as solicit such investment advisory or other services from any entity mentioned in this document. The analyst(s) and associate analyst(s) principally responsible for the preparation of this document may participate in the solicitation of businesses described aforesaid and would receive compensation based upon various factors, including the quality of research, investor client feedback, stock pickings and performance of his/her recommendation and competitive factors. The analyst(s) and associate analyst(s) may also receive compensation or benefit (including gift and company/issuer-sponsored and paid trips in line with the Bank’s policies) in executing his/her duties. Hence, the addressee or any persons reviewing this document should be aware of the foregoing, amongst others, may give rise to real or potential conflicts of interest.
PUBLIC INVESTMENT BANK BERHAD (20027-W)
26th Floor, Menara Public Bank 2
78, Jalan Raja Chulan,
50200 Kuala Lumpur
T 603 2268 3000
F 603 2268 3014
