HLIB Research has raised its FY26 and FY27 core net profit forecasts by 0.6%.
PETALING JAYA: Hiap Teck Venture Bhd
had a decent start to its financial year 2026 (FY26) with its first-quarter (1Q) performance coming in better than expected, according to Hong Leong Investment Bank (HLIB) Research.
Year-on-year, 1Q26 core net profit rebounded strongly to RM31.7mil, boosted mainly by improved performance at both trading and downstream segments amid lower raw material costs.
The steel company also saw higher core contribution from 27.3%-owned associate Eastern Steel Sdn Bhd (ESSB) on the back of improved gross profit margin.
Quarter-on-quarter both trading and downstream segments turned around, boosted by higher sales volumes amid stabilised steel prices.
On the sector outlook, HLIB Research said the global steel market conditions remained mixed with prices stabilising at lower levels amid cautious demand and ongoing supply adjustments.
China’s recently announced stricter capacity-swap requirements are expected to gradually reduce excess capacity, while infrastructure-led demand in parts of South and South-East Asia will continue to support regional steel consumption, according to the research house.
“On another note, management highlighted that the confirmed implementation of carbon tax from 2026 will influence cost structures and competitiveness across the steel industry, which has yet to be reflected in our earnings assumptions given the absence of details,” the research house pointed out.
For now, HLIB Research has raised its FY26 and FY27 core net profit forecasts by 0.6%.
This is as it recalibrated its earnings model following the release of Hiap Teck’s FY25 annual report.
“We maintain ‘buy’ with unchanged target price of RM0.36 based on a revised 5.8 times mid FY26 and FY27 core earnings per share of 6.2 sen.
“We continue to like Hiap Teck for its healthy balance sheet with net gearing of 0.27 times as at Oct 31, 2025 and attractive valuations,” the research house pointed out.
