KUALA LUMPUR: RHB Investment Bank Bhd (RHB IB) has selected five companies, namely Binastra Corp Bhd
, Eco-Shop Marketing Bhd, Kelington Group Bhd, LAC Med Bhd, and MR DIY Group (M) Bhd, as its top environmental, social, and governance (ESG) investment “Diamonds in the Rough” for 2026.
In the 11th edition of its annual thematic research note, it said that the stock selections were based on five key criteria, namely return on equity (ROE) of 15% or higher; 2026 net debt/shareholder funds of below 0.7 times; expanding margins in 2026, compared to that of 2025; trading at valuations below their respective industry averages; and ESG score being above their country medians.
“The Malaysian companies included in this edition were comparable to their Asean counterparts in one key aspect, as they met all five selection criteria.
“Our selection process combined both quantitative (screening) and qualitative (bottom-up analyses, mosaic theory, and industry expert insights) methodologies.
“All selected stocks fall within our coverage universe, ensuring a deep understanding of their business models, financial health, and management track records.”
RHB IB projected Binastra’s ROE at a strong 43.8% in the financial year of 2027 (FY27), up from 43.7% in FY26.
“It has approximately RM7bil unbilled order book, with 30% to 35% from Johor Baru and 10% to 15% from data centre (DC) projects, supports earnings momentum as Johor jobs secured in FY26 move into the higher end of the ‘S-curve’ from FY27.”
The bank expected Binastra to remain in a net cash position in FY27, giving it room to pursue more projects beyond DCs.
“DC jobs should also support cash flow, given their faster turnaround. We expect net margins to stay healthy, at above 7% from FY27 to FY29, versus 8.9% in FY26.”
Meanwhile, RHB IB forecasted Eco-Shop Marketing’s return on average equity (ROAE) to trend above 26% in FY27 to FY28.
“Accelerating store expansion to deepen market penetration should be the primary driver to robust earnings growth (three-year compound annual growth rate: 19%) and ROAE ahead,” it added.
“Its profit margin should also see healthy growth, thanks to economies of scale and favourable foreign exchange rates.”
The bank said that Eco-Shop Marketing’s net margin should expand and stabilise at the 9% level in the FY27 to 2028 forecast from 7.7% in FY25, as the scale of operations would increase at a faster pace to capture market opportunities.
“Investments in new distribution centres and favourable input costs on the back of a stronger ringgit and rising volumes should drive margin improvement,” it added. — Bernama
