UOB Kay Hian (Malaysia) Sdn. Bhd.
Date of Report: Friday, 29 August 2025
Malaysia Market Insights August 2025: Comprehensive Corporate Earnings Analysis and Key Investment Opportunities

Market Overview: Mixed Sentiment Amid Selective Growth

The Malaysian equity market in late August 2025 has delivered a range of corporate results, presenting both opportunities and risks for investors. Key indices such as the FBMKLCI hovered at 1,587.07, down marginally, with the Finance and Properties sectors showing strength while Industrials and Plantations posted moderate gains. Foreign participation in the market rose to 40.5%, indicating renewed international interest in Malaysian equities.

Axiata Group Berhad: Frontier Market Challenges & Asset Monetisation Potential

Rating: BUY | Target Price: RM3.00 | Share Price: RM2.58
Axiata Group’s 1H25 underlying net profit plunged 36% year-on-year to RM206 million, missing consensus and in-house expectations. The deconsolidation of XLSmart and merger integration costs overshadowed solid performances in SMART, Dialog, and Robi. Dividends remained steady with a 5 sen interim payout, and the group reaffirmed its commitment to a 10 sen full-year dividend.

Key Points:

• Integration costs from XL-Smartfren merger impacted profitability
• Dividend payout supported by XL Axiata disposal proceeds and RM1bn dividends from OpCos/associates
• Asset monetisation potential in edotco towers (RM17-21bn EV), possibly netting RM7-9bn in equity value
• Environmental target: Net-zero emissions by 2050; Social: 30% women in senior management by 2025; Governance: >90% training completion on anti-corruption and cybersecurity

Bumi Armada: FPSO Margin Compression and Strategic Cash Retention

Rating: HOLD | Target Price: RM0.40 | Share Price: RM0.37
Bumi Armada’s 1H25 profit fell short of forecasts due to reduced FPSO margins and higher repair costs, most notably for FPSO Olombendo. The company is prioritizing cash retention for new projects instead of dividends, following the first dividend payment in eight years in 2024.

Key Points:

• FPSO Kraken rate step-down and higher staff costs impacted margins
• Exceptional items: RM18m forex loss, RM16m exploration expense, RM28m trustee distribution
• Net gearing improved to 0.3x after RM0.4bn debt repayments
• Actively bidding for new contracts, balance sheet positioned for project expansion
• ESG highlights: LTIF nil in 2023, 42% female onshore staff, 4 of 7 board members independent

Genting Malaysia: Operational Recovery but Dividend Cut Surprises

Rating: BUY | Target Price: RM2.35 | Share Price: RM1.98
Genting Malaysia delivered sequential earnings improvement, mainly driven by Resorts World Genting (RWG) with robust gaming and non-gaming volumes. However, the group surprised investors by not declaring an interim dividend for 2Q25, citing capital preservation for the group’s New York casino bid and high gearing.

Key Points:

• RWG EBITDA lifted by higher gaming volume, VIP win rates, and 33% YoY jump in theme park ticket sales
• US operations EBITDA fell 33% QoQ and 1% YoY due to currency headwinds, higher opex, and Empire consolidation
• UK operations improved, aided by new casino acquisition
• No interim dividend declared, DPS forecast reduced to 6-10 sen for 2025-26
• Valuation remains attractive: 5.8x 2026 EV/EBITDA and 5.1% yield
• ESG: Significant community and environmental investments; strong adherence to governance standards

Inari Amertron: Positioning for Advanced Packaging Growth

Rating: BUY | Target Price: RM2.36 | Share Price: RM1.98
Inari Amertron’s FY25 results were in line, with the group positioning for exponential growth in advanced semiconductor packaging. The Lumileds acquisition, in partnership with San’an, will diversify its portfolio and reduce earnings cyclicality.

Key Points:

• Lumileds deal (US\$239m EV) expands into automobile and specialty LEDs
• 25.5% stake to be funded by private placement proceeds; immediate synergies via Penang operations
• Share price down 35% YTD, but risk-reward now attractive at -1SD below 7-year mean PE
• ESG: FTSE4Good inclusion, robust anti-corruption policies, legal compliance for foreign workers

RHB Bank: Robust Non-Interest Income and Attractive Valuation

Rating: BUY | Target Price: RM7.55 | Share Price: RM6.67
RHB Bank’s 2Q25 net profit surged 11.2% YoY to RM804m, driven by strong non-interest income growth and lower provisions. The stock trades at a compelling 0.82x P/B, significantly below the sector average, yet posts a comparable ROE of 10%. Dividend yield remains robust at 7%.

Key Points:

• Non-interest income up 24% YoY, driven by forex gains and trading
• Loan growth led by mortgages, auto, corporate, and commercial banking
• NIM compressed 9bps YoY, deposit repricing expected to offset cuts
• GIL ratio stable at 1.51%, asset quality sound
• ESG: RM3.3bn green loans, zero new coal financing, strong gender diversity and scholarships for underprivileged children

Tenaga Nasional: Stable Dividends Amid Higher Opex and Tax

Rating: BUY | Target Price: RM16.30 | Share Price: RM13.44
Tenaga Nasional’s 2Q25 normalised net profit reached RM998m, impacted by increased repair and maintenance, cybersecurity spending, and absence of reinvestment tax allowance. The group declared a 25 sen interim dividend and is expected to maintain a 60% payout ratio.

Key Points:

• 2Q25 electricity demand up 2% YoY, 7% QoQ
• Generation costs fell as coal prices continued to ease
• EBITDA margins fell due to higher cybersecurity and maintenance costs
• Dividend yield projected at 4%
• ESG: Targeting 8,300MW RE by 2025; net zero by 2050; strong social and governance initiatives

Other Corporate Highlights: Gabungan AQRS, Genting Bhd, IOI Corp, KPJ Healthcare, Mah Sing, OM Holdings

Gabungan AQRS (Cease Coverage)

• FY25 core net profit RM13.1m, 46% YoY decrease
• Construction division slowed as projects neared completion
• Lawsuit against Prolintas for RM501m in damages could be a rerating catalyst
• Bidding for government PPP project may drive future growth

Genting Bhd

• 2Q25 core EBITDA RM2.09bn, down 1% YoY
• Weak leisure volumes at RWS and RWLV, F&B and hotel also softer
• DPS cut a surprise; TP trimmed to RM3.34

IOI Corporation

• 4QFY25 core net profit RM324m (+16% QoQ)
• Upstream earnings strong; FFB production up 28% QoQ
• Downstream manufacturing swung to loss due to weak refinery and oleochemical margins
• Final dividend 5.5 sen/share, full-year DPS 10.5 sen

KPJ Healthcare

• 2Q25 net profit RM82m (+5.7% YoY), below expectations due to lower inpatient volume and margin pressure
• Bed occupancy rate fell 4ppt YoY to 62%
• KPJ Kuala Selangor hospital targets record EBITDA breakeven in first year
• TP cut to RM3.10, maintain BUY

Mah Sing Group

• 2Q25 core net profit RM67m (+13% YoY), in line with forecasts
• Stronger 2H25 expected from higher progress billings and new launches
• Data centre land sale and glove segment recovery key future catalysts
• Maintain BUY, TP RM1.57

OM Holdings

• 1H25 core net loss RM40.9m, below expectations
• Weak ferroalloy prices and lower volumes from steel mills
• 2025/26/27 earnings cut to -RM80m/RM13m/RM48m
• Downgraded to SELL, TP RM0.63

Technical Trading Picks: AirAsia X and SCGM

• AirAsia X (AAX MK): Technical BUY, target RM1.78 (+14.8%), supported by bullish MACD crossover and RSI uptick
• SCGM (SCGM MK): Technical BUY on breakout, target RM0.705 (+18.5%), positive momentum confirmed by MACD and DMI signals

Conclusion: Opportunities Amid Volatility—Key Themes for Investors

The August 2025 earnings season in Malaysia reveals a mixed landscape, with frontier market challenges, margin compressions, and dividend surprises offset by robust growth in banking, utilities, and select property names. Asset monetisation, strategic acquisitions, and ESG leadership emerge as pivotal themes for re-rating and long-term value creation. Selective sector exposure and diligent stock picking remain crucial for navigating the current market environment.
Note: This article is based solely on the broker research report dated August 29, 2025, by UOB Kay Hian (Malaysia) Sdn. Bhd.