Phillip Research Sdn Bhd (Malaysia)
Date of Report: 16 July 2025

Malaysia Market Outlook July 2025: Stock Picks, Sector Insights, and Key Corporate Headlines

Market Overview: Indices, Participation, and Sentiment

The Malaysian market experienced a cautious trading session, with the FBMKLCI closing at 1,525.40, marking a 0.8% decline. The broader FBMEmas and FBMSHA indices also posted losses, reflecting subdued investor sentiment. Market activity showed local institutions and retail investors as net buyers, while foreigners remained net sellers.

Sectoral performance was mixed, with REITs as the sole gainer (+0.8%), led by Al-Salam Real Estate Investment (+3.8%). Construction, Energy, and Healthcare were the top losers, impacted by notable drops in OCR Group Berhad (-12.5%), Handal Energy Bhd (-11.1%), and Adventa Bhd (-4.9%). Among FBMKLCI constituents, Genting Bhd, Mr D.I.Y. Group, and Public Bank Bhd led declines.

Top Stock Picks: Detailed Analyst Ratings and Targets

Phillip Research has provided an updated list of their top stock picks across various sectors, complete with target prices, current prices, and expected upsides. Below is a comprehensive table of these recommendations:

Company Spotlight: Telekom Malaysia

Telekom Malaysia (TM) remains a core BUY recommendation, albeit with a revised 12-month target price of RM8.05. The positive sentiment is supported by TM’s structural long-term growth, particularly driven by the Unifi and TM Global segments. The company is on schedule with the expansion of its KVDC and IPDC data centers, targeted for completion by end-2025. Additionally, TM’s 51:49 joint venture with Singtel to develop a 64MW AI-ready data centre in Iskandar Puteri is progressing well and is expected to be operational by the second half of 2026.

Key Malaysian Corporate News

• Zetrix AI (formerly MyEG Services): Plans to challenge Bursa Malaysia’s public reprimand for Main Market listing rule breaches. The share price dropped 7% amid governance concerns.
• Master Tec Group: Signed an MOU with Senari Synergy to assess establishing a cable manufacturing facility in Sarawak. The joint feasibility study will run for one year.
• DXN Holdings: Partnered with Invest Kedah to boost Langkawi’s eco-tourism and agriculture, including a fish hatchery project on Pulau Tuba with 40 tanks and 480,000 fish.
• Luxchem: Acquired five leasehold industrial plots in Klang for RM45.6 million, focusing on income-generating real estate investments.
• Tomypak: Its subsidiary increased its stake in EB Packaging to 90% via a RM6.69 million acquisition, based on EB Packaging’s profit after tax for FY2024.

Policy and Regulatory Developments

• Micro Business Association: Urges open dialogue among government, e-commerce platforms, and sellers regarding new platform fees, including a 54 sen support fee per order and higher ‘pay later’ commission rates. The association highlights the challenge posed by cheap imports and emphasizes support for MSME-focused platforms.
• Malaysia’s Neutral Trade Policy: The Deputy Investment, Trade and Industry Minister warned that Malaysia’s neutral stance is being exploited by some exporters to evade tariffs and sanctions. The government will tighten oversight to uphold credibility.
• ECRL Project: The first electric trains and locomotives for the East Coast Rail Link are expected to arrive by year-end, with commissioning tests scheduled for June 2026.
• Freedom of Information Bill: The government plans to table the Bill by year-end to bolster transparency and public access to government decisions, aiming to build trust and encourage democratic participation.
• Selangor Smart Parking: The state revised its new 10-year smart parking concession, now involving local councils, Rantaian Mesra (MBI-owned), and a private company.

Global Market Highlights

• Wetlands Report: The destruction of global wetlands could result in up to US\$39 trillion in economic losses by 2050. Wetlands have been disappearing at the fastest rate of any ecosystem since 1970.
• China’s Economy: China’s GDP grew 5.2% in Q2 2025, beating expectations, largely due to strong exports. However, domestic demand remains sluggish, and price declines threaten to drag growth.
• OPEC Outlook: OPEC anticipates the global economy may outperform in the second half of the year, maintaining robust oil demand forecasts for 2025 and 2026, supported by summer travel.
• US Inflation: Consumer prices rose at their highest rate in five months in June, likely due to tariffs. However, underlying inflation remains moderate, especially in vehicle prices.
• US-Indonesia Trade Deal: The US signed a trade deal with Indonesia as the EU prepares potential retaliatory measures. Indonesia’s total trade with the US neared US\$40 billion in 2024, with the US running an \$18 billion deficit.

Sector and Company Outlooks: Deep Dive

Banking Sector

Buy ratings are concentrated on major players such as CIMB Bank (+40.3% upside), Public Bank (+24.4%), RHB Bank (+25.4%), Hong Leong Bank (+25.9%), and Maybank (+23.3%). Affin Bank is rated Sell due to an anticipated -9.4% downside. Alliance Bank and Ambank are rated Hold and Buy, respectively.

Construction

AME Elite, Kerjaya Prospek, and Binastra are favored with strong double-digit upside. Sunway Construction has a Hold rating with a slight negative expectation.

EMS & Gaming

Nationgate and RGB International stand out, the latter with the highest upside across all picks (+139.3%). Genting is a Buy, while Genting Malaysia is rated Hold with a negative return projected.

Healthcare & Rubber Glove

Optimax and UMediC are both Buys with substantial upside potential. Kossan and Hartalega are seen as stronger picks in the glove sector, with Top Glove given a Hold.

Industrial & Oil & Gas

Critical and Uzma offer impressive upsides (72.3% and 108.2%, respectively). Bumi Armada and Dayang Enterprise are also notable for their robust growth prospects.

Plantations & Property

The sector is mixed, with SD Guthrie and Sarawak Plantation on Buy, while Genting Plantation, Hap Seng, IOI, and KLK are mostly Hold or slightly negative.

Renewable Energy & Technology

Solarvest and BM Greentech are top renewable picks, and TT Vision, UWC, and Frontken are preferred in technology for their double-digit upside.

Telco & Transport

OCK Group (Buy), Telekom Malaysia (Buy), and AGX Group (Buy) are the most attractive, with Telekom Malaysia singled out for its data centre expansion and JV with Singtel.

Disclaimers and Regulatory Notices

This report is for informational purposes and does not constitute financial advice or a solicitation to buy or sell securities. All recommendations are based on impartial, independent research. Investors are encouraged to consider their specific investment objectives and risk profiles when acting on this information.

Contact Information

Phillip Research covers a wide regional presence across Singapore, Malaysia, Hong Kong, Japan, Indonesia, China, Thailand, France, United Kingdom, United States, Australia, Cambodia, India, Turkey, and Dubai, with multiple investor centres accessible to clients in Malaysia.