PETALING JAYA: AWC Bhd
’s financial results for its second quarter ended Dec 31, 2025 (2Q26) fell short of analysts’ estimates, largely due to weaker performance in its environment segment.
However, the group’s outstanding orderbook of RM909mil, with its environment division reaching a record high of RM224mil, has kept analysts cautiously optimistic.
Hong Leong Investment Bank (HLIB) Research said AWC’s net profit for 2Q26 of RM4.2mil declined 39.8% year-on-year (y-o-y), coming in at 34% of its full-year forecast.
“The earnings shortfall was due to slow billings within the environment segment, as a sizeable portion of secured projects remain at the early stage of execution,” the research house said.
AWC also recorded softer revenue, which fell 9.6% y-o-y, dragged by its environment and rail divisions, according to HLIB Research.
It added that the group’s performance dip in the environment segment can be attributed to a slowdown in the Middle East market.
AWC declared an interim dividend of 50 sen in 2Q26, bringing its dividend per share for the first half of its financial year 2026 (1H26) to 50 sen, compared to 80 sen in 1H25.
“We opine that the environment segment’s performance will largely hinge on site progress in Malaysia (40% of segment sales) and Singapore (40%), with the record-high order book pointing to a potential rebound in subsequent quarters, subject to execution,” it said.
HLIB Research trimmed its FY26, FY27 and FY28 earnings forecasts for the group by 7.3%, 6.7% and 2.4%, respectively, to reflect the lowered burn rate in the environment segment.
It has maintained its “buy” call on the stock with a lowered target price (TP) of 77 sen.
Meanwhile, Apex Securities Research cut its FY26 to FY28 earnings forecasts for AWC by a steeper 17.1%, 16.4% and 15.5%, respectively, to account for more conservative margin estimates within its rail division that reflect a lower-margin product mix and lower order fulfilment.
“The adjustment also reflects the short-term revenue decline in the Middle East environmental market, where project progress remains soft,” it added.
The securities firm also downgraded its recommendation on the stock to “hold” with a revised TP of 60 sen, down from 72 sen.
It said bright spots remain, though, for AWC, such as its facilities segment’s concession extension at revised market rates and strategic expansion into highvtechnology facility management, its rail division’s pivot towards stable, service-based recurring income, and strengthened group orderbook growth.
“We expect a significant earnings inflection point in 2H26 as revenue recognition from recently secured projects gain momentum, positioning the group favourably for financial year 2027,” Apex Research.
