PETALING JAYA: Life Water Bhd
’s medium-term earnings prospects look increasingly positive, supported by confirmed price hikes and expanded plant and distribution centre facilities, according to MBSB Research.
The research house said its earnings outlook for the company’s financial year 2026 (FY26) and FY27 has grown more constructive following a visit to Life Water’s KKIZ8 plant in Kota Kinabalu, Sabah.
Consequently, it has raised its core profit after tax and non-controlling interests forecasts for FY26, FY27, and FY28 by 5.7%, 10.2%, and 11.9%, respectively, driven by average selling price (ASP) increases which offset a rising input cost environment.
Life Water confirmed an ASP hike of 60 sen per carton on drinking water effective May 2026, and a second 60 sen hike in July 2026, contingent on resin spot prices staying elevated, MBSB Research shared.
Both price hikes land while the group is consuming its three to five months worth of low-cost resin inventory at about US$850-US$900 per tonne, compared to the current spot price of around US$1,380 per tonne.
Its FY27 estimates reflect the full-year benefit from both ASP increases, which are expected to offset higher resin costs after the company’s stockpile is used up around mid-to-late 2026 and new purchases are made at prevailing market prices.
The group is adopting a wait-and-see approach amid the uncertain operating environment, limiting future orders to one to two months.
“We trim FY27 gross margin estimates to reflect the higher blended resin cost, though this still represents a healthy margin profile given pricing power has been re-tested and confirmed by trade acceptance of the May 2026 hike,” MBSB Research said.
The brokerage maintained its “buy” call on Life Water with a higher target price of RM1.63, adding that the stock’s current levels offer an attractive entry point.
