PETALING JAYA: Hong Leong Industries Bhd
(HLI) is expected to see firmer earnings growth going forward, driven by a stronger pipeline of premium Yamaha motorcycle models and improving margins from its tiles business.
The group’s prospects are also set to benefit from resilient demand tied to Malaysia’s expanding gig economy, alongside contributions from its new Guocera tiles plant scheduled to begin production in July 2026.
Kenanga Research highlighted in a note that HLI plans to introduce seven new motorcycle models, which are expected to boost volume and margins for the financial year ending June 30, 2026 (FY26).
These include the Yamaha NVX, Yamaha YZF-R25, Yamaha MT-09 and MT-09 SP, Yamaha Tenere 700, and Yamaha TMAX Tech Max, introduced progressively between September 2025 and April 2026.
This continues from FY25, when HLI rolled out several “margin-driven models”, namely the Yamaha PG-1, Yamaha MT-09, XMAX 2025 and TMAX Tech Max 2025.
“Over the next two to three years, HLI plans to introduce a total of 15 to 17 all-new and facelifted models with attractive pricing within the respective target market range,” Kenanga Research said.
In addition, it stated HLI’s new Guocera tiles facility remains on track for production commencement in July next year.
“Fully automated, the plant can produce bigger format size tiles which command higher margins compared to existing production,” it said.
Kenanga Research maintained its “outperform” call on HLI and a target price of RM21, based on an unchanged price-earnings ratio of 12 times its FY27 forecast earnings per share. The research house said HLI remains attractive “as it is a strong proxy to the booming gig economy, given the critical role of motorised two-wheelers in executing online delivery transactions”.
Kenanga Research also cited HLI’s association with Yamaha’s leading market position in Malaysia’s motorcycle segment, as well as its solid war chest with a net cash of RM1.9bil that could be deployed for earnings-accretive acquisitions.
It added that the stock offers an attractive dividend yield of 6%.
According to Kenanga Research, HLI’s nine-month FY26 results met expectations, supported by consistent demand for its all-new motorcycle models, lower operating costs from a firmer ringgit against the US dollar, and a shift toward more premium products with stronger margins.
HLI’s net profit rose to RM430.53mil for the first nine months of FY26 from RM368.86mil a year earlier, while revenue increased to RM2.77bil from RM2.73bil.
It posted a higher net profit of RM138.37mil for the third quarter ended March 31, 2026, compared with RM98.88mil in the corresponding quarter last year.
