RM73.7m (+21.6% YoY). The results were within expectations, accounting for 45% of our full-year forecast and 47% 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 30 June 2026, orders in hand stood at RM1.36bn, representing about 0.8x FY25 revenue and providing earnings visibility to 2028. The split between grid, data centre and renewable energy is pending the analyst briefing.
• Maintain BUY recommendation with a higher TP of RM3.07 (from RM2.97), based on an unchanged 20x P/E applied to our FY27F EPS of 15.4sen.
Within expectations. 2QFY26 core net profit came in at RM40.6m (+22.3% QoQ, +28.2% YoY), bringing 6MFY26 CNP to RM73.7m (+21.6% YoY). The results were within expectations, representing 45% of our full year forecast and 47% of consensus estimates, supported by stronger sales volume and export contribution.
QoQ. SCGBHD’s 2QFY26 revenue rose 21.9% QoQ to RM527.6m while core net profit increased 22.3% QoQ to RM40.6m, mainly driven by higher sales volume, particularly in the power cables and wires and control and instrumentation segments.
YoY. SCGBHD’s 2QFY26 revenue grew 25.8% YoY to RM527.6m, driven by higher sales volume and ASP adjustments in the power cables and wires segment in line with raw material trends, driving core net profit up 28.2% YoY to RM40.6m.
YTD. 6MFY26 revenue rose 18.5% YoY to RM960.3m, driven by higher sales volume in the power cables and wires segment and a 44% YoY increase in exports. Core net profit grew 21.6% YoY to RM73.7m, with CNP margin broadly stable at 7.7% (vs 7.5% in 6MFY25).
Dividend. SCGBHD declared an interim dividend of 1.2 sen per share for 2QFY26, bringing 6MFY26 DPS to 1.2 sen, unchanged YoY. This is in line with our full-year DPS assumption of 2.4 sen, implying a yield of about 0.9%.
Outlook. Demand visibility stays solid, anchored by the RM1.36bn orderbook to 2028 and stillfirm data centre demand; the book’s grid, data centre and RE split is pending the analyst briefing. We expect gross profit margins to hold near 13%: the 132kV Milliken certification supports more HV sales in 2H, but LV and MV still dominate (2QFY26 mix: 59% LV, 31% MV, 1% HV), with the HV shift representing gradual upside rather than a step-change. The capacity ramp (60,000 km by end-2026, 65,000 km in 2027, plus the new furnace and compounding lines) is volume-led and skewed to LV, supporting revenue more than margin. The half’s inventory build is order- and pricedriven and backed by the book; operating cash flow stays pressured as inventory and receivables scale, but the balance sheet carries it comfortably after the placement. Exports remain a growth line (+44% YoY for the half, with the 2Q dip on delivery timing), with the US an opportunistic rather than committed outlet.
Orderbook. As of 30 June 2026, SCGBHD’s orderbook stood at RM1.36bn, representing about 0.8x FY25 revenue and providing earnings visibility to 2028. The split of the book between grid, data centre and renewable energy was withheld pending the analyst briefing, so we treat the segmental mix as pending.
Earnings forecasts. We make no material change to our FY26F and FY27F core net profit forecasts of RM163.1m and RM194.0m.
Valuation & Recommendation. We maintain our BUY recommendation on SCGBHD with a higher TP of RM3.07 (from RM2.97), based on an unchanged 20x P/E applied to our FY27F EPS of 15.4sen, alongside a three-star ESG rating. Following housekeeping procedure on our sharebase, we made changes to our weighted average share base count, resulting in higher TP. We like SCGBHD for its (i) strong earnings visibility backed by its RM1.36bn orderbook, (ii) exposure to Malaysia’s rising power infrastructure and data centre developments, and (iii) growing export presence, particularly within the US market. Ongoing capacity expansion and improving vertical integration 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 | 4.065852 | 4.097386 |
| EUR | 4.589381 | 4.597416 |
| CNY | 0.610175 | 0.610647 |
| HKD | 0.518032 | 0.522054 |
| SGD | 3.177971 | 3.202709 |