PETALING JAYA: Scientex Bhd
is expected to sustain earnings momentum into the financial year ending July 31, 2027 (FY27), driven by resilient packaging demand and continued contributions from its property division.
A stronger product mix, operational efficiencies and a healthy property sales pipeline should provide further support, although packaging margins may moderate from the elevated levels seen in FY26.
BIMB Research reiterated a “buy” call on Scientex and raised its target price to RM4.10 from RM3.91, after rolling forward its valuation to FY27 earnings and reflecting the stronger packaging earnings base.
“Packaging should remain the principal earnings-growth driver, supported by a more favourable product mix, operational improvements and potential utilisation gains. Property earnings visibility remained supported by RM2.1bil in unbilled sales, higher planned launches and the progressive ramp-up of six new townships.”
TA Research also maintained a “buy” call while raising its target price to RM4.95 from RM4.82. It lifted the FY27 and FY28 core earnings forecasts by 4.7% following the incorporation of FY26 results and introduced its FY29 forecast of RM677.6mil, representing 1.8% year-on-year (y-o-y) growth.
“We expect the segment to sustain its momentum in FY27, supported by stable demand for both consumer and industrial packaging,” TA Research said.
It noted that Scientex’s average utilisation rate improved by one percentage point y-o-y to 61% in FY26 alongside stronger sales volumes.
Cost pressures from higher raw material prices are expected to be mitigated through timely cost pass-throughs, greater sourcing of competitively priced raw materials from China and a higher contribution from value-added consumer packaging.
For property, TA Research expects earnings to remain supportive, backed by resilient affordable housing demand, RM2.1bil in unbilled sales and a sizeable 11,049-acre land bank with potential future gross development value of RM40.7bil.
Affin Hwang Research raised its FY27 and FY28 earnings forecasts for Scientex by 8% and 6.1%, respectively, and maintained a “buy” call with a higher target price of RM4.50 from RM4.35.
“Renewed Middle East tensions and a recovery in plastic resin prices should keep the plastics segment on a strong momentum over the coming quarters, while resilient demand for its affordable housing products underpins steady earnings from the property division,” it said.
Kenanga Research was more cautious, maintaining its target price at RM3.91, but downgrading Scientex to “market perform” from “outperform” following the recent share price appreciation.
