PETALING JAYA: MGB Bhd
can expect a compounded annual growth rate of 10.5% in earnings for financial year 2025 (FY25) to FY28, backed by a pipeline of new property projects, including affordable housing, according to RHB Research.
The research house said the company is making steady progress on its Rumah Selangorku Idaman projects, along with other developments with a combined gross development value (GDV) of over RM1bil.
A major catalyst would be faster-than-expected development of the Kertih Terengganu Industrial Park (KTIP), which has an estimated GDV of RM747mil, as well as securing construction jobs in the Johor Baru area.
RHB Research has a “buy” call on the stock with a target price (TP) of 64 sen per share.
Meanwhile, Mercury Research maintained its “buy” call on MGB with a TP of RM1.01 a share.
The research house also kept its FY26 earnings forecast after accounting for MGB’s largest overseas contract win of up to RM444mil to undertake engineering, procurement and construction works on 440 apartment units in Al Madina Al Manowara, Saudi Arabia.
Key risks to MGB’s valuation include failure to replenish its construction order book, subdued property sales, and fluctuations in construction costs.
Despite near-term headwinds, Mercury Research remains optimistic about MGB’s prospects, considering the estimated RM5bil in future potential revenue from five key drivers: construction, affordable housing, pocket land developments, the KTIP industrial project, and the Saudi Arabia precast venture.
MGB also has a consistent pipeline of launches, including the Cameron Highlands project (RM128mil GDV) scheduled for the second quarter of 2026 (2Q26) and 3Q26, Idaman Cahaya Phase 3 (RM117mil GDV) in 1Q26, and Idaman KITA (RM328mil GDV) in 3Q26.
The company is preparing two affordable housing projects comprising 3,840 units with a combined GDV of RM762mil under Rumah Selangorku 3.0, with launches expected in 3Q26 and 2Q27.
MGB’s current construction orderbook remains robust at RM1.15bil.
RHB Research expects new wins to amount to RM700mil, after taking into account MGB’s effective share, which would provide earnings visibility for the construction segment.
MGB’s growth prospects are further underpinned by a tender book worth 800 million Saudi riyal in Saudi Arabia.
