SCGBHD’s 1QFY26 core net profit came in at RM33.2m (+0.7% QoQ, +14.0% YoY), bringing 3MFY26 CNP to RM33.2m (+14.0% YoY). The results were within expectations, accounting for 20% of our full-year forecast and 22% of consensus estimates.
Ongoing capacity expansion remains a key growth catalyst, with cable and wire capacity expected to increase to 60,000 km by end-2026 and 65,000 km by end of 2027, from the current 54,980 km.
As of 31 March 2026, orders in hand stood at RM924.9m, comprising >50% LV cables, ~35% MV cables, ~6% HV cables, with the balance from control cables and other products, representing 0.5x FY25 revenue.
Maintain BUY recommendation with a higher TP of RM2.97 (from RM2.57), based on an unchanged 20x P/E applied to our rolled forward FY27F EPS of 14.9sen.
Within expectations. 1QFY26 core net profit came in at RM33.2m (+0.7% QoQ, +14.0% YoY), bringing 3MFY26 CNP to RM33.2m (+14.0% YoY). The results were within expectations, representing 20% of our full year forecast and 22% of consensus estimates supported by stronger export contribution and lower administrative expenses.
QoQ. SCGBHD’s 1QFY26 revenue declined 14.0% to RM432.7m, mainly due to fewer operating days during the Chinese New Year and Hari Raya festive holidays, which moderated production and delivery activities. In addition, earnings were affected by a shift in product mix. Consequently, core net profit increased marginally by 0.7% QoQ to RM33.2m, supported by lower administrative expenses and improved other income, partially cushioning the impact from weaker revenue. CNP margin improved to 7.7% (vs. 6.5% in 4QFY25).
YoY. SCGBHD’s 1QFY26 revenue increased 10.7% to RM432.7m, mainly driven by the power cables and wires segment, which grew 6.6% YoY to RM391.0m on the back of higher sales volume and ASP adjustments in line with raw material trends. Meanwhile, the control and instrumentation segment recorded a strong 78.5% YoY growth to RM13.4m, supported by higher sales of control and instrumentation cables and aluminium rods. Geographically, export revenue surged 117.1% YoY to RM67.5m, driven by higher exports to the US and project fulfilment for a regional entity operating in Malaysia. Consequently, core net profit rose 14.0% YoY to RM33.2m, while CNP margin improved to 7.7% from 7.4% in 1QFY25, supported by lower administrative expenses and higher other income.
Outlook. We remain positive on SCGBHD’s outlook, supported by resilient demand for power cables and wires driven by grid enhancement works, renewable energy initiatives under NETR, and ongoing data centre developments in Malaysia. Meanwhile, overseas demand particularly from the US market, continues to gain traction, supported by rising infrastructure activities and ongoing product certifications. The Group’s outstanding orderbook of RM924.9m as at end of March 2026 provides healthy earnings visibility through FY27, underpinned by orders from utility companies, EPCC contractors and resellers, including the RM121.1m TNB variation order secured in Feb 2026. Operationally, SCGBHD’s ongoing capacity expansion remains a key growth catalyst, with cable and wire capacity expected to increase to 60,000 km by end of 2026 and 65,000 km by end of 2027, from the current 54,980 km. Additionally, the newly completed aluminium furnace and upcoming plastic compound facility should strengthen vertical integration and support margin sustainability going forward.
Total orders in hand. As of 31 March 2026, SCGBHD's orders in hand stood at RM924.9m, comprising >50% LV cables, ~35% MV cables, ~6% HV cables, with the balance from control cables and other products, representing 0.5x FY25 revenue.
Earnings forecasts. We revise downward our FY26F and FY27F earnings forecasts by -2.67% and -2.5% to RM163.1m and RM194.0m respectively following updated assumptions after the latest quarterly results.
Valuation & Recommendation. We maintain our BUY recommendation on SCGBHD with a higher TP of RM2.97, based on an unchanged 20x PE applied to rolled over to FY27F EPS of 14.9sen, alongside a three-star ESG rating. We continue to like SCGBHD for its (i) strong earnings visibility backed by its RM924.9m orderbook, (ii) exposure to Malaysia’s rising power infrastructure and data centre developments, and (iii) growing export presence, particularly within the US market. Additionally, ongoing capacity expansion and improving vertical integration initiatives are expected to further support the Group’s long-term growth trajectory and margin sustainability.
Risks. Volatile raw material prices, slower-than-expected orderbook replenishment and weaker export demand may pose downside risks to earnings.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 3.955678 | 3.983535 |
| EUR | 4.617050 | 4.621850 |
| CNY | 0.585177 | 0.585795 |
| HKD | 0.504786 | 0.508370 |
| SGD | 3.095618 | 3.117454 |