MFCB 2QFY25 Earnings Below Expectations, Downgraded to HOLD

Kuala Lumpur – Mega First Corp Bhd (MFCB) posted 2QFY25 core net profit (CNP) of RM93.5m (+44.5% QoQ, –15.3% YoY), lifting 6MFY25 CNP to RM158.3m. Results missed forecasts (33% of house, 35% of consensus) on weaker Resources and Packaging, plus continued associate losses at Edenor.

Performance

QoQ, stronger hydrology at Don Sahong Hydropower (DSHP) lifted Renewable Energy PBT (+27.1%), offsetting weaker Resources (–14.4%), Packaging (–19.7%) and wider Edenor losses (+42.7%). YoY, CNP fell on softer Resources (–34.3%), weaker Packaging (–61.3%) and higher Edenor drag, though Renewable Energy stayed resilient (+2.4% PBT, 74.9% margin).

Outlook

3Q earnings should benefit from peak rainy-season output at DSHP, partly offset by MYR strength. Resources and Packaging remain under pressure, while Edenor’s recovery lags.

Revisions & Valuation

Earnings cut 13.1%–12.2% for FY25F–27F on lower USD/MYR (4.30), weaker margins and prolonged Edenor losses. SOP TP reduced to RM3.68 (from RM5.43), ESG rating at three stars. Call downgraded to HOLD.

Positives & Risks

Defensive profile remains, with ~90% of PBT from Renewable Energy, strong cash flow (>RM500m annually) and modest gearing (0.34x). Key risks: MYR strength, petcoke costs, slow Packaging recovery.

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