PETALING JAYA: The recently launched MY Value Up Programme Guidebook is not a broad-market re-rating catalyst, but rather a stock-selection framework, according to Apex Research.
In a note to clients, it said that the guidebook by the Securities Commission and Bursa Malaysia is a deliberate attempt to shift the focus of Malaysian listed firms away from merely growing earnings towards generating returns above the cost of capital.
“Historically, many Malaysian companies have been evaluated based on earnings growth, dividend yields, asset backing or order book visibility.
“MY Value Up introduces a different question: Is management deploying capital efficiently enough to create value for shareholders?”
The guidebook was launched on June 9 and marks a significant milestone under the Capital Market Masterplan 2026 to 2030, representing Malaysia’s most comprehensive attempt to improve corporate value creation, capital allocation discipline and investor communication.
The programme draws inspiration from similar initiatives in Japan, South Korea and Taiwan, all of which have sought to address valuation discounts and improve market competitiveness through enhanced disclosure, governance and shareholder value considerations.
“While comparisons with these markets are inevitable, we believe investors should be careful not to overstate the potential for an immediate broad-based market re-rating.
“Instead, we view MY Value Up primarily as a stock-selection framework that can help identify companies capable of delivering superior capital efficiency, shareholder returns and long-term value creation.”
At its core, MY Value Up is not simply a disclosure exercise.
The guidebook repeatedly emphasises concepts such as return on equity (ROE) relative to cost of equity, return on invested capital relative to weighted average cost of capital, shareholder return frameworks, capital allocation discipline, governance accountability and investor engagement.
Apex Research, which is positive about the guidebook, believes that not every company will embrace the framework to the same extent.
Not every company will improve capital allocation, and not every company will be willing to set measurable targets or hold management accountable for delivery.
“As a result, we expect the market to increasingly distinguish between companies that merely participate and companies that genuinely execute.
“The likely beneficiaries are companies exhibiting one or more of the following characteristics: persistent valuation discounts relative to intrinsic value or sector peers; excess cash balances or underutilised assets; conglomerate structures where capital allocation can be improved; low but repairable ROE profiles; management teams willing to communicate measurable value creation objectives; and clear pathways towards improved shareholder returns, asset monetisation or capital recycling.
“In our view, a low price-to-book ratio remains a useful starting point, but valuation alone is insufficient.
“The more attractive opportunities are those where valuation discounts coexist with identifiable levers for improving capital efficiency,” added Apex Research.
