MAG: Robust Performance Driven by Cost Efficiencies, Analyst Maintains “BUY” Rating

Financial results for the recently concluded 15-month period ending December 2025 demonstrated a strong operational showing, with earnings broadly meeting expectations on a normalised 3-month run-rate basis. The company reported a 58.9% year-on-year surge in revenue, reaching RM464.2 million, primarily attributed to the extended reporting period and increased sales volumes.

However, margins experienced normalisation from previously elevated levels. Gross profit margin saw a decline to 21.3% from 26.2% in the comparative 15MFY24 period, as the cost of sales increased. Similarly, the EBITDA margin softened to 20.1% from 26.4%, influenced by a higher operating expenditure margin and reduced other income. Despite these adjustments, overall margin performance aligned closely with the analyst’s FY26 assumptions for gross profit, EBIT, PBT, and PAT margins.

Performance Review

On a quarter-on-quarter basis, revenue dipped by 8.9% compared to the fourth quarter of FY25, reflecting a softer trading environment. This decline is consistent with historical quarterly fluctuations. Gross profit margin contracted by 6 percentage points to 15.3%, although operating expenses improved to 2.1% from 6.1% in 4QFY25 due to the absence of non-recurring expenses. Nonetheless, a higher effective tax rate led to a slight easing of the net profit margin to 8.3% from 13.1%.

Future Outlook

Looking ahead, the company is poised for sustained growth in its core aquaculture and food trading divisions. This growth is expected to be underpinned by ongoing improvements in farming efficiency and productivity, coupled with the adoption of advanced smart-farming technologies. Expanded marketing initiatives and distributor networks are also set to broaden market reach. Despite a degree of external market uncertainty, the company’s efficiency drives and integrated operating model are anticipated to support steady financial performance into 2026.

Following the latest results, analysts have revised their FY25E top-line and earnings forecasts upward by 45% to account for the extended 18-month financial period, while maintaining unchanged FY26E/FY27E forecasts, which represent normalised 12-month operating cycles. The investment bank maintains its “BUY” recommendation, reiterating a target price of RM0.22, based on a 9.5x FY27E Price-to-Earnings (PER) ratio applied to an estimated EPS of 2.3 sen. This valuation is considered undemanding compared to the peer average trailing PER of 11.1x.