CEKD Berhad Announces Robust Interim Financial Results for Q2 2026

Key Financial Highlights

• Revenue Surge: CEKD Berhad reported revenue of RM21.86 million for the six months ended 28 February 2026, marking a significant increase of RM2.98 million (15.8%) from RM18.89 million in the previous year. This growth was primarily driven by the consolidation of a newly acquired subsidiary, Shin Fuji, during the reporting period.
• Profit Before Tax (PBT): The Group achieved a PBT of RM5.52 million, up RM0.16 million (2.98%) from RM5.36 million in the corresponding period last year. The improvement was mainly attributable to higher revenue from the acquisition.
• Net Profit/Total Comprehensive Income: Net profit for the period stood at RM4.18 million, up from RM4.07 million. Of this, RM3.97 million was attributable to owners of the company, while RM218,000 was attributed to non-controlling interests.
• Earnings Per Share (EPS): Basic and diluted EPS rose to 2.04 sen for the period, compared to 1.80 sen a year earlier.
• Dividend Announcement: An interim single-tier dividend of RM0.0050 per ordinary share (totaling RM972,864.98) was declared for the financial year ending 31 August 2026. The entitlement date was 11 February 2026, payable on or before 6 March 2026.

Balance Sheet Strength

• Total Assets: The Group’s total assets increased to RM89.50 million, up from RM85.22 million at the end of August 2025.
• Equity Position: Total equity improved to RM81.06 million (previously RM76.88 million), with equity attributable to owners rising to RM79.42 million.
• Net Assets Per Share: Net assets per share increased to RM0.41, compared to RM0.39 previously.
• Cash and Bank Balances: Cash reserves grew to RM7.57 million, up from RM6.59 million.
• Loan and Borrowings: The Group’s secured borrowings, primarily denominated in Ringgit Malaysia, were RM335,000 for current liabilities and RM2.93 million for non-current liabilities.

Cash Flow Performance

• Operating Cash Flow: Net cash generated from operating activities was RM6.64 million, a substantial increase compared to RM3.95 million in the prior period.
• Investing Activities: Net cash used in investing activities amounted to RM5.23 million, largely due to acquisition of property, plant, equipment, and goodwill from the new subsidiary.
• Financing Activities: Net cash generated from financing activities was RM459,000, reflecting repayment of term loans and lease liabilities, as well as dividend payments.
• Cash Position: Cash and cash equivalents at period end were RM7.57 million.

Segmental Performance

• Manufacturing Segment: The manufacturing division remains the dominant revenue generator, contributing RM21.69 million in revenue for the period.
• Trading Segment: Trading revenue rose to RM2.80 million, reflecting expansion efforts post-acquisition.
• Inter-segment Revenue: RM2.62 million in inter-segment revenue was eliminated for consolidation purposes.

Corporate Developments & Price Sensitive Information

• Acquisition of Shin Fuji: The consolidation of Shin Fuji has proven strategic and timely, broadening market exposure and strengthening the company’s earnings base. This acquisition is a major catalyst for both revenue and profit growth and may positively influence investor sentiment and share price.
• Capital Commitments: The Group has contracted capital commitments of RM13.5 million for property, plant, and equipment, signaling ongoing investment in capacity expansion.
• Dividend Declaration: The Board declared an interim dividend, providing direct shareholder returns and demonstrating confidence in cash flow and profitability.
• IPO Proceeds Utilisation: As at 28 February 2026, RM469,000 remains unutilised from the IPO proceeds. The company has extended the timeline for utilisation up to 29 September 2027, with details reflecting ongoing investment in factory acquisition, machinery, software upgrades, marketing activities, and repayment of borrowings.

Risks and Outlook

• Macroeconomic Concerns: Malaysia’s manufacturing PMI declined to 49.3 in February 2026, suggesting renewed contraction and softer demand. Geopolitical tensions in the Middle East have triggered volatility in global energy markets, leading to a sharp rise in diesel prices (RM6.72/litre in Peninsular Malaysia as of April 2026). This is likely to exert cost pressures on transportation, logistics, construction, agriculture, and manufacturing, potentially feeding into inflation and dampening consumer spending.
• Raw Material Price Risk: Elevated oil prices are expected to increase costs of petroleum-derived industrial inputs (e.g., resins, synthetic rubber, polyethylene), compressing manufacturer margins and possibly impacting export demand and domestic consumption.
• No Material Litigation or Contingent Liabilities: The Group reported no material litigation or contingent liabilities as of the report date.
• Tax Position: Effective tax rate for the period was 24.15%, closely aligned with the statutory rate of 24.00%.

Investor Takeaways

• Positive Earnings Momentum: The acquisition and consolidation of Shin Fuji have driven revenue and profit growth, reinforcing CEKD Berhad’s earnings base.
• Dividend Return: The interim dividend declaration underscores management’s confidence in the business and provides direct value to shareholders.
• Strategic Investment: Ongoing capital commitments and unutilised IPO proceeds indicate continued investment in expansion and operational improvement.
• Risks: Investors should monitor macroeconomic and geopolitical risks, particularly energy and raw material cost inflation, which may affect margins and consumer demand in coming quarters.

Disclaimer

The information provided in this article is based on CEKD Berhad’s unaudited interim financial report for the second quarter ended 28 February 2026. This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.

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