MBSB Investment Bank Bhd (MBSB Research) maintained a BUY call on Capital A Bhd with an unchanged target price of RM0.77 while Hong Leong Investment Bank Bhd (HLIB) also maintained a BUY rating with a lower target price of RM0.76.
Both analysts cite earnings normalisation after restructuring, stronger underlying segment recovery and improving medium-term aviation ecosystem prospects.
Capital A’s 1QFY26 core net profit of RM26.9 million came in below expectations, accounting for about 11% to 12% of full-year estimates, although analysts noted a clear turnaround in profitability following the disposal of its aviation business.
MBSB Research highlighted that the group swung back to profit from a loss a year earlier, supported by stronger EBITDA performance across key segments despite seasonal weakness and the removal of inter-group income. It said the group’s earnings profile remains skewed to the second half of the year.
On a segmental basis, analysts noted mixed performance across the group’s businesses, with ADE benefiting from expanded maintenance operations and Teleport supported by higher cargo and parcel volumes, while AirAsia Move was impacted by weaker revenue and EBITDA due to seasonality.
HLIB said the results were affected by the loss of inter-group interest income of around RM15 million to RM16 million per quarter following the aviation disposal, which weighed on overall profitability despite improvements in logistics and MRO operations.
Sequentially, earnings were also softer as revenue edged lower quarter-on-quarter due to weaker seasonal demand across most segments. However, analysts said Capital A remains on track to submit its PN17 uplift application by June or July 2026, supported by two consecutive profitable quarters.
Both research houses added that the group continues to focus on expanding its aviation support, logistics and digital platforms, with long-term growth expected to be driven by its broader ASEAN and international network expansion and improving operational synergies across its ecosystem.
As of 11.08 am, the stock price increased 2.44% to RM0.42.
