PETALING JAYA: PGF Capital Bhd
aims to re-enter other countries within the Asean market to diversify its customer and revenue base while ramping up capacity.
The group is involved in the manufacturing of glass mineral wool for insulation, agriculture and property development.
Mercury Securities Research has forecast revenue growth of 24.3% to 62.6% over PGF’s financial years ending Feb, 28, 2026, and 2027, and possibly achieving a new record high top-line performance in 2027.
PGF is also a net beneficiary of a stronger Australian and New Zealand dollar given the fact that about 80% of its revenue is from foreign markets, with 61% denominated in Australian dollars, and 16% in New Zealand dollars, while over 97% of its cost of goods sold remained in ringgit.
Based on the research house’s sensitivity analysis, every 2% change in the Australian and New Zealand currencies could result in an estimated 1.7% change in PGF’s reported revenue.
This shows that PGF’s topline sensitivity is cushioned by the offsetting effect on ringgit-denominated input costs, particularly in a strengthening ringgit environment.
However, a stronger ringgit, particularly against the Australian and New Zealand dollars, may also dampen reported revenue and margins from the Oceania market, which remains PGF’s largest export region.
The research house said while this trend presents some translational risks to PGF’s export segment, it believes these risks are manageable.
It said the primary growth driver has been the Oceania region, where insulation sales benefited significantly from increased adoption of glass wool insulation, following the implementation of Australia’s mandateon higher thermal efficiency standards.
Glass wool remains a preferred low-cost solution for meeting energy efficiency requirements, positioning PGF as a key beneficiary.
The research house initiated coverage on PGF with a “buy” call and a sum-of-parts derived target price RM2.43 a share, implying 40% potential upside. The shares closed at RM1.73 in yesterday’s trading.
The valuation translates to an undemanding 2027 forward price-earnings ratio of 4.2 times, a steep discount to the construction materials sector average of 10.1 times.
The research house said it believes PGF warrants a re-rating, underpinned by strong earning visibility backed by robust demand for glass mineral wool.
PGF delivered a robust four-year compounded annual growth rate of 18.9% on its revenue, with topline expanding from RM65mi1 in 2021 to RM155mil this year, reflecting strong operational execution and rising product demand in key markets.
