PETALING JAYA: Main Market-listed PGF Capital Bhd
, a leading insulation producer in South-East Asia, expects its new glass wool plant in Kulim East to commence operations in September, boosting production capacity to 65,000 tonnes per year from 25,000 tonnes per year.
TA Research believes PGF could easily sell 20% of its additional capacity to its existing customers in Japan and South-East Asia.
“As such, we keep our utilisation rate assumption at 50% of the enlarged capacity of 65,000 tonnes for the financial year ending Feb 28, 2027 (FY27),” it said.
The research house said rising production costs have been a dampening factor, as it understands that PGF would not be able to pass on the entire cost increase to its customers.
Looking ahead, higher energy prices are expected to raise energy costs in the third quarter of FY27 (3Q27), with energy accounting for one-third of total production costs, it said, adding that the recovery of the Australian dollar against the ringgit would likely provide some buffer against the cost pressure in the second half of FY27 (2H27).
TA Research said PGF’s housing project in Tanjung Malim is on track for launch in FY27, with an estimated Phase 1 gross development value of RM300mil.
“As for the water supply issue, which has been holding back the project launch, that has been addressed and we expect the company to obtain the final approval from Lembaga Air Perak soon,” it added.
The research house said that excluding an unrealised fair value gain from derivatives of RM1.3mil and other exceptional items, PGF’s 1Q27 core profit of RM7.6mil accounted for 32% of its full-year forecast and 24% of consensus earnings.
“However, we consider the results within our expectations, as 2H27 earnings are expected to be dampened by cost escalations,” the research house said.
The company reported an 18.3% year-on-year increase in net profit to RM8.9mil for 1Q27, from RM7.5mil previously.
Revenue increased 7.8% to RM43.7mil from RM40.6mil in the corresponding quarter, reflecting continued momentum and resilient demand in its core insulation segment.
The company said the insulation segment remained its main contributor, generating RM43.6mil or 99.6% of total revenue, compared with RM40.5mil in 1Q26.
PGF executive director and group chief executive officer Fong Wern Sheng said in a statement that sustained demand from the company’s key markets – particularly Oceania – supported by regulatory-driven energy efficiency standards, was a key driver of the quarter’s results.
The group’s balance sheet remains robust, with a net gearing ratio of 0.5 times and net assets per share of RM1.52.
