PETALING JAYA: Scientex Bhd
is expected to post a stronger showing in its financial year ending July 31, 2026 (FY26), underpinned by property demand and cost optimisation at its packaging division.
Scientex’s core profit for the first quarter of FY26 (1Q26) declined by 2% quarter-on-quarter (q-o-q) to RM141mil.
However, RHB Research said this was in line with expectations, at 24% to 25% of its estimates and consensus, respectively.
Net gearing was at 0.49 times compared with 0.48 times in FY25, and management continued guiding for net gearing to remain below 0.5 times, assuming no major land acquisitions, the research house said.
“The packaging segment’s revenue improved 3% q-o-q though it was flattish year-on-year (y-o-y), while its plant utilisation rate improved slightly q-o-q compared with about 60% for 4Q25.
“Meanwhile, earnings before interest and taxes (Ebit) rose by a 10% q-o-q and 50% y-o-y, driven by a favourable sales mix, as well as operational efficiency. This brought its margin for 1Q26 to 7.4% compared with 6% in FY25, and 6.9% for 4Q25,” RHB Research said.
The property segment posted a 9% and 8% y-o-y increase for its sales and Ebit, respectively, on the back of steady construction progress for ongoing projects.
“On a q-o-q basis, sales fell 9%, leading Ebit to decrease by 7%, which was largely within estimates, given the bulk of Scientex’s property launches are recognised in 4Q,” the research house said.
RHB Research said while Scientex believes demand for the packaging segment will slowly recover, it maintained its cautious outlook amid subdued market sentiment and intense competition.
“Management is keeping its margin target of 6% to 7% for FY26, underpinned by lower raw-material costs, which were down between 7% and 11% y-o-y in 1Q26, and improved efficiencies, while aiming to grab market share by increasing volume,” the research house said.
The packaging segment made up 54% and 23% of group revenue and Ebit, respectively, in 1Q26.
Meanwhile, the group launched its 708 acre Scientex Jawi township in Penang and unveiled the 1,094 acre Scientex Muar project in Johor in 1Q26.
Scientex Muar is set for launch in 2Q26, along with Scientex Pulai 4.
“Total gross development value launched in 1Q26 came in at RM645mil for about 1,800 units, which translates to an average take-up rate of 45%. It expects to progressively scale up to 10,000 units annually within the next two years,” the research house said.
RHB Research maintained a “neutral” call on Scientex with a target price of RM3.60.
The research house said key risks include unfavourable changes in demand for flexible packaging products and affordable homes, and sharp increases in raw material prices.
