Malaysia

Bermaz Auto Bhd (BAuto) has issued a cautious outlook for its performance in the financial year ending 30 April 2026, citing intensifying competition and prevailing macroeconomic headwinds. For the fourth quarter ended 30 April 2025 (4Q25), the group reported a sharp 77% year-on-year decline in net profit to RM21.2 million, translating to earnings per share of 1.82 sen. Revenue fell 44% year-on-year to RM528.65 million, primarily due to a marked contraction in sales volume from its Mazda and Kia domestic operations. The group attributed this decline to the ongoing influx of competitively priced Chinese-manufactured vehicles in the Malaysian market, which has significantly disrupted established brand performance. For the full financial year ended 30 April 2025 (FY25), BAuto posted a 55% drop in net profit to RM155.91 million or 13.35 sen earnings per share. Revenue also declined 33% year-on-year to RM2.6 billion. The company noted that the Malaysian automotive sector is facing a subdued growth trajectory, shaped by persistent inflationary pressures and a slowdown in global economic momentum. Uncertainties stemming from geopolitical conflicts and evolving trade tariff negotiations, particularly involving the United States, are expected to have further repercussions on domestic economic sentiment and consumer spending patterns. Additionally, the surge of Chinese vehicle brands continues to weigh on market dynamics, adversely affecting the performance of other marques in Malaysia. BAuto indicated that the timing and success of upcoming model launches or facelifts will remain contingent on prevailing market sentiment and broader economic conditions. Citing data from the Malaysian Automotive Association, BAuto reported that the total industry volume (TIV) for April 2025 stood at 60,527 units, representing a 16.8% decline (12,177 units) compared to March 2025’s volume of 72,704 units. This contraction was largely attributed to a shorter working month in April due to Hari Raya festivities and a front-loaded delivery push in March. Year-to-date, TIV for the first four months of 2025 reached 248,730 units, reflecting a 5.4% decline (14,320 units) from the same period in 2024, which saw 263,050 units sold. Outside of Malaysia, BAuto’s operations in the Philippines are operating within a more resilient macroeconomic environment. According to the Department of Finance, the Philippines recorded a GDP growth rate of 5.4% in the first quarter of 2025 (4Q24: 5.3%). The outlook for the remainder of 2025 remains positive, with GDP projected to grow around 6.0% in the coming quarters. In respect of FY25, BAuto’s Board of Directors has approved a fourth interim single-tier dividend of 1.50 sen per share. This is significantly lower than the 4.75 sen and special dividend of 7.00 sen declared in the corresponding period last year. The dividend will be payable on 5 August 2025, with the entitlement date set for 18 July 2025. -The Star

KPJ Healthcare Bhd is expected to navigate a more challenging operating landscape from July 2025 onwards, following the impending expansion of Malaysia’s Sales and Service Tax (SST), which is poised to elevate rental and medical tourism-related costs. In a client note, MIDF Research highlighted the recent asset injection by KPJ involving two hospital properties a 15-storey facility at KPJ Ampang Puteri and a 10-storey building at KPJ Penang into Al-‘Aqar Healthcare REIT, with a combined transaction value of RM241 million. Under the terms of the agreement, KPJ will lease the Ampang Puteri hospital for 11 years and the Penang hospital for 15 years. Both leases include a 2% annual rental escalation and an option for a 15-year extension. MIDF Research noted that the base rental for the two assets will amount to approximately RM15 million in 2025. With the SST implementation, this is projected to increase to RM16 million. Although contracts executed prior to the SST’s effective date will enjoy a one-year exemption, rental costs are anticipated to climb to nearly RM17 million in 2026, and further escalate to RM22 million by 2040. The brokerage also underscored that KPJ has previously transferred 19 of its 30 hospitals to Al-‘Aqar. Excluding the latest additions, lease payments for 2024 are expected to surpass RM107 million. Proceeds from the sale-and-leaseback deal — RM100 million allocated for debt repayment and RM139 million earmarked for working capital — are expected to provide short-term financial flexibility. MIDF believes this capital deployment will help KPJ manage the impact of economic headwinds and policy shifts. However, the implications for KPJ’s medical tourism segment could be more pronounced. With between 9% and 12% of the group’s revenue derived from international patients, the SST is estimated to add RM24 million to RM32 million in annual tax expenses. This may erode KPJ’s cost competitiveness relative to both domestic and regional peers and heighten consumer price sensitivity. Consequently, MIDF Research has revised its earnings forecast for the financial years 2025 to 2027 downwards by 1%. Its target price for KPJ stock has been adjusted from RM3.02 to RM3.00, based on a price-to-earnings ratio of 28.8 times and an updated estimated earnings per share of 10.4 sen. Despite the projected increase in operating costs, the research house maintains a ‘neutral’ stance on KPJ, citing the overall minimal impact of the SST on the group’s earnings outlook. -The Star

PETALING JAYA: GDEX Bhd remains cautiously optimistic as it prepares for the broadened scope of the Sales and Service Tax (SST) set to take effect on 1 July. The courier services provider acknowledges the upcoming changes will “definitely have an impact” on its operations, particularly with the inclusion of leasing services under the 8% tax rate for companies generating over RM500,000 annually in leasing revenue. Managing Director and Group Chief Executive Officer Teong Teck Lean, speaking to select media following the company’s annual general meeting, stated that GDEX is actively evaluating the implications of this expanded tax. He noted that many of the properties the group occupies are under long-term lease agreements, which were signed without consideration for the new tax requirements. “As we are leasing a significant number of premises, the introduction of SST on leasing services will undoubtedly affect us,” said Teong. “Our immediate task will be to work with our landlords and relevant stakeholders to navigate this financial adjustment, whether through renegotiation or absorption of costs.” Despite this development, Teong expressed confidence in the group’s strategic trajectory. GDEX has adopted a more collaborative approach to its business model, partnering not only with traditional allies but also exploring synergies with competitors. This shift is expected to support the group’s improving operational momentum. Financially, the group has demonstrated a tangible recovery. For the first quarter of the financial year ending March 2025 (1Q25), GDEX reported a net loss of RM164,000—a marked improvement from the RM2.2 million net loss recorded in the same quarter of the previous year. For the full financial year 2024 (FY24), GDEX narrowed its net loss significantly from RM34.9 million in FY23 to RM1.8 million. Notably, the group posted a net profit of RM4.8 million in the fourth quarter of FY24. Additionally, GDEX reported RM53.4 million in earnings before interest, tax, depreciation and amortisation (EBITDA) and maintained a robust net cash position of RM197.2 million. During its AGM, shareholders approved a final single-tier dividend of 0.2 sen per share for FY24. Looking ahead, the group has allocated RM20 million for strategic acquisitions in 2025, aimed at strengthening the GD Exchange ecosystem. However, Teong reaffirmed that the company will continue to exercise caution and discipline in its acquisition strategy. “Synergistic value and alignment with our business direction are essential. We prefer to take a controlling interest in acquisitions to ensure full integration and operational alignment,” he added. As part of its commitment to operational enhancement, GDEX has invested RM8 million in enterprise resource planning systems and is actively investing in technology, artificial intelligence, and environmental, social and governance (ESG) initiatives. However, Teong emphasised that ESG investments must yield attractive returns. He cited the group’s use of electric trucks for short-distance deliveries in the Klang Valley as an example of balancing sustainability with cost-efficiency, particularly in the context of rising diesel prices. Separately, GDEX announced plans to divest non-core assets, including a property in Ipoh. This divestment aligns with the group’s continued focus on cost optimisation and digital transformation, enabling reallocation of capital to high-impact areas such as infrastructure integration, talent acquisition and digital systems. -The Star

KUALA LUMPUR: Majlis Amanah Rakyat (MARA) has committed RM10 million to bolster Bumiputera entrepreneurship within the motorcycle maintenance and repair sector through the MARA-Petronas Automotive Entrepreneur Development (PUMP) MotoExpert Programme.   Datuk Dr Asyraf Wajdi Dusuki, Chairman of MARA, announced that the strategic allocation will support 30 motorcycle workshop operators this year, each eligible for business financing facilities of up to RM300,000. In addition to the capital injection, MARA is allocating RM1 million specifically for structured technical training. Selected entrepreneurs will also receive assistance with rebranding, business financing, supply chain integration, and overall operational enhancement. “Entrepreneurs will benefit not only from financial support but also from structured training, spare parts supply, and assistance in transforming their premises’ branding and operating systems to ensure greater competitiveness,” said Dr Asyraf during the programme’s launch in Kuala Lumpur. He further emphasised that MARA will closely monitor the initiative, noting that the programme aims to create a robust and integrated entrepreneurial ecosystem rather than serving as a standalone financing scheme. In a concurrent statement, MARA confirmed that PETRONAS Lubricants Marketing Malaysia Sdn Bhd (PLMM) will be a key strategic partner, directly supplying PETRONAS Sprinta lubricant products to MotoExpert workshops. This direct supply model eliminates intermediaries and improves profit margins for participating entrepreneurs. PLMM will also provide support in areas such as marketing, technical training, and industry collaboration, ensuring workshop operators are well-positioned for long-term sustainability and growth. The MotoExpert programme is open to graduates of MARA’s Technical and Vocational Education and Training (TVET) institutions or other recognised training centres. Applicants must have operated a motorcycle workshop for a minimum of six months and recorded annual sales exceeding RM360,000. Selection is subject to a formal interview process. -Bernama

Syarikat Takaful Malaysia Keluarga Bhd (Takaful Malaysia) is positioned to deliver improved financial results in the coming quarters, supported by a structural realignment in its product portfolio and a focus on margin expansion. Affin Hwang Investment Bank Research has reaffirmed its “buy” rating on the company, maintaining a 12-month target price of RM3.80. The research firm attributed its bullish outlook to the insurer’s evolving business model, which it expects to drive faster profit recognition and bolster long-term shareholder returns. A key driver behind this optimism is Takaful Malaysia’s strategic transition towards shorter-tenure Credit Takaful products, particularly personal financing (PF) offerings, which are increasingly displacing the traditionally dominant mortgage reducing term Takaful (MRTT) plans. This shift has been catalysed by bancatakaful partners imposing a 10-year cap on mortgage refinancing tenures, prompting a larger share of borrowers to opt for shorter-term personal financing solutions. The ratio of MRTT to PF within the portfolio has notably shifted from 65:35 to 32:68, a trend that Affin Hwang views as a catalyst for faster profit emergence. The shorter average tail-length of these products enables more front-loaded delivery of services, expediting the realisation of the contractual service margin. While the full financial impact may not be immediately evident in 2025, the research house anticipates the earnings uplift to gain traction in the second half of the year and beyond, enhancing the company’s overall earnings trajectory and return on equity. Despite facing a sector-wide slowdown in demand for medical and hospitalisation takaful products—driven by rising medical inflation and annual premium repricing—Takaful Malaysia is leveraging this environment to focus on profitability. With many consumers reducing or discontinuing their medical coverage, insurers have an opportunity to optimise margins. Takaful Malaysia is capitalising on this by selectively underwriting higher-quality accounts. The strategy has already yielded strong early results. In the first quarter of 2025, the company’s employee benefits segment recorded a substantial 77% year-on-year increase, supported by both volume growth and repricing initiatives. From a valuation perspective, Takaful Malaysia continues to present an attractive proposition. It currently trades at 7.6 times forward earnings—significantly below the sector average of approximately 10.5 times—while offering a projected dividend yield of between 5.2% and 5.5% for the period 2025 to 2027. -The Star