Aquawalk Bhd - Within Expectations
Wed, 03-Jun-2026 07:54 am
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AQUAWALK (0380)

Target Price (RM)

0.27

Recommendation

Buy

•    AQUAWALK's 1QFY26 core net profit came in at RM8.5m (+11.5% QoQ), accounting for 23% of our full-year forecast and broadly in line with expectations.
•    We fine-tune our FY26F/FY27F/FY28F earnings forecasts by -2.1%/-1.0%/-3.0% to RM37.0m/RM41.4m/RM35.7m following the incorporation of FY25 annual report figures.
•    Consequently, we maintain our BUY recommendation with a lower of TP RM0.27 (from RM0.37) based on 12.0x FY27F EPS of 2.2sen (from 18.0x FY26F EPS of 2.0sen). 


Results within expectations. After adjusting for an unrealised forex loss of (+RM2.5m) AQUAWALK's 1QFY26 core net profit came in at RM8.5m (+11.5% QoQ). The results were within our expectations, accounting for 23% of our full-year forecast.

 

Dividend.  No dividend was declared for 1QFY26 (FY25 DPS: 1.0sen). Management reiterated its minimum dividend payout policy of 30%.

 

QoQ. Revenue declined 15.2% QoQ to RM25.3m due to seasonally softer visitor traffic following the peak year-end holiday period in 4QFY25. Nevertheless, higher visitor yields from recent ticket price revisions and resilient operating margins helped offset the impact of lower footfall. Excluding the RM2.5m unrealised forex loss, core net profit increased 11.5% QoQ to RM8.5m.

 

YoY. No meaningful YoY comparison is available as AQUAWALK was listed in November 2025.

 

Outlook. We remain positive on Aquawalk's growth prospects, supported by ongoing yield enhancement initiatives, new attraction launches and regional expansion plans. Management expects visitor traffic to improve progressively through 2HFY26, underpinned by school holidays, long weekends and Visit Malaysia 2026 promotional activities. At Aquaria KLCC, Discovery Zone 6 is scheduled to commence operations in August 2026 and is expected to drive incremental visitor spending through a separately ticketed interactive experience. This will be followed by the launch of the Penguin Tank attraction, targeted by end-FY26 or early-FY27, which management expects to support a further uplift in ticket yields. In Thailand, the Group plans to launch the Immersive Art Studio in 3QFY26, expanding its experiential offerings and enhancing visitor engagement. Meanwhile, Aquawalk's longer-term growth will be driven by its new oceanarium project at Jawa Timur Park, Indonesia, which is expected to be completed by end-2027. Management targets approximately 300k visitors and RM11m revenue in its first year of operations, supported by access to the theme park's existing annual footfall of 2-4m visitors. With RM166m cash and no borrowings, all announced projects are fully funded by existing IPO proceeds, providing ample capacity to execute its expansion pipeline while maintaining dividend flexibility.

 

Earnings Revision. Following the incorporation of FY25 annual report figures, we fine-tune our FY26F/FY27F/FY28F earnings forecasts by -2.1%/-1.0%/-3.0% to RM37.0m/RM41.4m/RM35.7m (from RM37.8m/RM41.8m/RM36.8m), mainly to reflect updated operating assumptions and annual report disclosures.

 

Valuation and Recommendation. We maintain our BUY call on AQUAWALK with a lower TP of RM0.27 (from RM0.37) after rolling forward our valuation base to FY27F. Our TP is based on 12.0x FY27F EPS of 2.2sen (from 18.0x FY26F EPS of 2.0sen). The applied multiple represents a 24% discount to the peer average forward PE of 15.7x, reflecting our cautious view on the sustainability of earnings growth, given the Group's reliance on ticket yield improvements amid relatively muted visitor volume growth, as well as execution risks associated with its ongoing expansion projects. Nevertheless, we remain positive on AQUAWALK's long-term growth prospects, supported by (i) earnings growth catalysts from Discovery Zone 6, the upcoming Penguin Tank attraction and the Immersive Art Studio in Phuket, (ii) improved visitor yields through selective ticket price adjustments and new experiential offerings, and (iii) future earnings contributions from its Indonesia oceanarium project.

Risks. Failure to secure new strategic locations and lease renewals, revocation of licenses & permits and high fixed cost structure that may pressure margins. 

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