Malaysia’s Business Sectors Set for Mixed 2025 as Growth and Challenges Collide

KUALA LUMPUR, March 14, 2025 – Malaysia’s business landscape in 2025 promises a blend of resilience and hurdles across key sectors, driven by global trends, government initiatives, and shifting consumer demands. Here’s a sectoral roundup based on the latest outlook.

Auto Sector: Steady Climb Amid Affordable Push

The auto industry anticipates a slight uptick in total industry volume to 820,000 units, fueled by affordable car demand and Chinese automakers’ localization efforts. MBM Resources and Hup Lee Industries (HLIND) lead the pack, capitalizing on mid-market adjustments despite fuel subsidy rationalization.

Banking Sector: A Safe Bet with High Returns

Banking shines with a 6% loan growth forecast and stable net interest margins of 2.0%-2.5%. CIMB Group Holdings stands out for its dividend yield, while Hong Leong Bank (HLBANK) and AMMB Holdings offer growth potential. Maybank and RHB Bank remain dividend darlings amid solid fundamentals.

Construction Sector: Building on Mega Projects

Construction is poised for a 9.4% surge, powered by over RM180 billion in infrastructure projects like the Penang LRT and Johor-Singapore SEZ. Gamuda, IJM Corporation, Sunway Construction (SUNCON), WCT Holdings, Kimlun Corporation, Kerjaya Prospek Group, and Azam Jaya lead the charge.

Consumer Sector: Cautious Optimism

Consumer goods expect a steady 4% retail growth, though subsidy cuts and tariff hikes loom. Fraser & Neave (F&N) and Mr DIY Group (MRDIY) are top picks, navigating headwinds with resilience.

Healthcare and Glove Sector: Recovery in Sight

Healthcare and gloves rebound with rising demand and potential U.S. tariffs on Chinese rivals lifting average selling prices to USD20-USD22 per 1,000 pieces. Hartalega Holdings and Kossan Rubber Industries shine in gloves, while IHH Healthcare thrives amid growing healthcare needs.

Oil & Gas Sector: Crude Confidence

Oil & gas enjoys a positive outlook with Brent crude at USD70-USD75 per barrel in early 2025. Yinson Holdings, Bumi Armada, Dayang Enterprise, and Keyfield International ride robust upstream demand, despite downstream sluggishness.

Plantation Sector: Palm Oil Power

Plantation sees crude palm oil prices at RM4,500-RM5,000 per tonne, driven by tight supply and biodiesel demand. Hap Seng Plantations (HSPLANT), Genting Plantations (GENP), Jaya Pertanian (JPG), TSH Resources, and Ta Ann Holdings lead with strong upstream gains.

Property Sector: Selective Strength

Property faces challenges but sees growth in sub-RM500k homes and industrial spaces. Sime Darby Property (SIMEPROP), Mah Sing Group (MAHSING), and Eupe Corporation stand out for their adaptability and value.

Power and Utilities Sector: Energized Future

Power and utilities thrive with data centre demand and renewable energy goals. Tenaga Nasional (TENAGA), YTL Power International (YTLPWR), and Solarvest Holdings power ahead as electricity usage soars.

REIT Sector: Holding Steady

Real estate investment trusts (REITs) remain neutral, with Sunway REIT (SUNREIT) and Pavilion REIT (PAVREIT) offering stable yields despite plateauing share prices.

Technology Sector: AI and Chips Surge
Tech booms with a RM1.11 billion Arm Holdings deal boosting AI semiconductors. Kelington Group (KGB), Oppstar Technology, Inari Amertron, PIE Industrial, and ITMAX System lead, leveraging fabless and smart city innovations.

Telco Sector: Bandwidth Boom

Telecommunications stays strong with stable mobile ARPU and USD16.5 billion in data centre investments. Maxis Communications, CelcomDigi (CDB), and Telekom Malaysia (TM) capitalize on rising bandwidth needs.

As Malaysia navigates 2025, strategic investments and policy clarity will be key to unlocking these sectors’ full potential.

Source: Rakuten Trade

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