PETALING JAYA: Corporate Malaysia has held up better than feared in the second quarter of financial year 2026 (2Q26), delivering a respectable earnings season despite the economic and market shockwaves from the US-Iran war.
CIMB Research said it was positive on the results season for 2Q26, with the earnings beat ratio improving to 0.95 times from 0.52 times in the first quarter.
“Of the 98 companies under our coverage that reported results between June and August, 18% beat expectations (up from 12% in 1Q26), while 19% missed (improving from 24% in 1Q26) with the remainder broadly meeting expectations.
“The improvement was led by the auto, plantation, rubber gloves, and transport sectors.”
Auto players benefitted from stronger associate contributions and a recovery in China motor operations, while plantation players outperformed on stronger fresh fruit bunch production, higher crude palm oil average selling prices, and robust downstream earnings.
Rubber glove makers benefited from stronger sales volumes and average selling prices as well as better margins, while transport players were supported by stronger cargo volumes and petroleum shipping earnings.
Overall, aggregate earnings rose 14% year-on-year and 9% quarter-on-quarter in 2Q26.
However, CIMB Research noted that earnings disappointments were concentrated in the oil and gas, consumer and utilities sectors, which collectively accounted for 53% of the 19 companies that missed expectations.
Meanwhile, BIMB Research said the earnings disappointments were mainly from consumer-related names due to sector-specific cost pressures and softer- than-expected operating conditions.
Kawan Food Bhd
was among such stocks, with BIMB Research downgrading its rating on the company.
Other stocks that were downgraded included Sime Darby Bhd, Telekom Malaysia Bhd and Ranhill Utilities Bhd.
In a separate note, Hong Leong Investment Bank Research said corporate Malaysia’s 2Q26 performance was a “decent showing”.
Sectors that disappointed were construction, gaming and gloves.
On the flipside, the research house said the automotive sector surprised on the upside with some companies delivering better-than-projected margins.
Separately, results of the oil and gas sector were a mixed bag.
Kenanga Research, meanwhile, said the satisfactory 2Q26 earnings season had the technology sector to thank.
It pointed out that the number of firms within its coverage universe, which missed expectations this quarter, is considered low at 21%. “The tech sector is also the area that we have had the larger share of target price upgrades this quarter.”
Kenanga Research said the automotive, glove and manufacturing sectors contributed the lion’s share of beats.
