PETALING JAYA: AGX Group Bhd
is expected to deliver stronger earnings in its second quarter of financial year 2026 (2Q26) on the back of increasing ramp-up of new aerospace logistics contracts and higher associate contributions from All-Link Air & Sea Pte Ltd (ALAS), says Phillip Capital Research.
In a note, it projected the group’s 2Q26 results – expected to be announced in late August – to see core earnings of RM6mil to RM7mil, a quarter-on-quarter rise from RM5.1mil in 1Q26 and a year-on-year (y-o-y) increase from RM5.3mil.
The research house forecast revenue and core earnings in 2026 to grow y-o-y by 31% and 71%, respectively.
Phillip Capital Research said it sees earnings momentum strengthening further in 2026 as newly secured aerospace logistics contracts with VietJet, Sun PhuQuoc and Malaysia Airlines ramp up and start bringing more meaningful contributions.
“While earnings growth is expected to normalise over 2027 to 2028, we continue to forecast healthy double-digit growth, underpinned by fleet expansion across its key airline customers.
“This should drive higher aerospace logistics volumes and reinforce the group’s medium-term earnings growth trajectory.”
The research house also highlighted ALAS as an underappreciated growth driver for AGX, with its securing of TikTok as a major customer and subsequent wins of other globally recognised multinational corporations reflecting its execution capabilities and rising credibility as a regional cross-border freight forwarder.
“For ALAS, we expect the financial year 2026 to resume its growth trajectory, driven by higher shipment volumes from TikTok and Customer H, while newly secured customers should contribute more meaningfully from the second half onwards.”
AGX established a strategic joint venture with Shanghai All-Link Logistics in 2022 through the incorporation of ALAS, in which it initially held a 30% equity interest.
Its stake is expected to dilute to 23.2% following ALAS’ proposed Singapore Exchange listing.
Phillip Capital Research said a stronger post-listing balance sheet is likely to improve ALAS’ customer acquisition and regional expansion abilities, offering potential upside to its earnings forecasts.
It noted that ALAS plans to pay out at least 30% of its profit after tax as dividends, which it believes could support higher dividend distributions by AGX to its shareholders over time.
Phillip Capital Research has maintained a “buy” call on AGX with an unchanged 12-month target price of 91 sen based on a 18 times multiple on 2027 price-to-earnings ratio. It said the current valuation is compelling, with the stock trading at 5.5 times 2027 price-to-earnings, despite stronger earnings visibility and multiple growth catalysts.
