PETALING JAYA: Apex Research remains cautious on Aquawalk Group Bhd
’s near-term prospects as persistent softness in international travel demand has yet to show clear signs of stabilisation.
However, the research house, in a note to clients, sees potential earnings catalysts from the launch of the Immersive Art Studio in Thailand and a stronger fourth quarter of financial year 2026 (4Q26) as Aquawalk’s management works to protect margins amid the current headwinds.
Management continues to flag ongoing tensions in the Middle East and broader regional macroeconomic concerns as key headwinds to inbound tourism, while remaining focused on protecting its top-line margins amid these pressures, it added.
The weakness is not only limited to Middle Eastern travellers, with Aquaria KLCC also likely to experience a broader pullback in inbound visitor numbers.
At Aquaria KLCC, Apex Research said Discovery Zone 6 has completed construction but is pending official approval from the Fire and Rescue Department before opening, with no firm timeline confirmed.
This will be followed by the Penguin Tank attraction, which remains targeted for 1Q27, with the RM7mil budget unchanged.
In Thailand, the Immersive Art Studio (Maya Recall Museum), developed in collaboration with KNOWCK Co Ltd under a revenue-sharing model, remains on track for launch by the end of September 2026.
Aquawalk’s management is hopeful for a stronger 4Q26, although this remains contingent on the absence of further major macroeconomic shocks.
Meanwhile, Apex Research said Aquawalk’s 2Q26 core net profit was RM4.7mil, down 44.5% quarter-on-quarter, bringing 1H26 core net profit to RM12.7mil, or just 34% of its full-year forecast, which was below expectations.
It cut Aquawalk’s financial year 2026 (FY26), FY27 and FY28 core net profit forecasts by 9%, 9% and 11%, respectively, to RM33.5mil, RM37.5mil and RM31.6mil, mainly to reflect the sharp decline in Aquaria Phuket visitor numbers amid persistent softness in international travel demand.
Apex Research also kept a “buy” call on the stock with a lower target price of 25 sen, following its earnings downgrade.
Its positive stance is underpinned by Aquaria KLCC’s still-resilient performance despite broader regional travel headwinds, a potential improvement in Aquaria Phuket’s outlook following the expected launch of the Immersive Art Studio, and the group’s healthy net cash position, which enabled its first interim dividend this quarter despite a softer earnings base.
The risks to its call include delays in regulatory approvals and execution risks associated with its regional expansion pipeline.
