Life Water Berhad received positive coverage from analysts after announcing its proposed RM46.8 million acquisition of a 90% stake in Hung On Thong Mini Supermarket Sdn Bhd, Hung Tai Enterprise (Sabah) Sdn Bhd and Kilang Mee Ban Soon Sdn Bhd.
MBSB Investment Bank Bhd (MBSB Research) maintained its BUY call on Life Water and raised its target price to RM1.73 from RM1.63, while CIMB Securities kept its BUY recommendation with an unchanged target price of RM1.77.
MBSB Research said the acquisition would strengthen Life Water’s expansion beyond bottled water by adding established staple food brands, manufacturing capabilities and a wider distribution network across Sabah and neighbouring markets. The research house noted that the deal supports Life Water’s strategy of building a broader consumer staples platform.
The acquisition involves three Sabah-based businesses involved in rice and rice noodle imports, food product wholesale and distribution, sauce and condiment manufacturing as well as noodle and red bean paste production. Collectively, the companies recorded an audited profit after tax of RM7.62 million for the financial year ended December 2025.
CIMB Securities’ analyst said the acquisition would strengthen Life Water’s FMCG staples portfolio while creating potential cross-selling opportunities through the combined distribution networks. The research house highlighted that Life Water could leverage its existing network of more than 90 trucks and over 5,000 touchpoints in East Malaysia to expand Hung Tai Group’s product reach.
MBSB Research said the purchase consideration implies an attractive valuation, with the deal expected to be earnings accretive once completed. The vendors have also provided a minimum profit guarantee of RM7.5 million annually for FY2027 and FY2028, supported by a retention sum of RM5 million.
The acquisition is expected to be completed within three months from the signing of the share sale agreement, targeted around October 2026. MBSB Research raised its valuation multiple to 17 times from 16 times to reflect Life Water’s improved earnings diversification and growth prospects.
As of 10 am, the stock price slips 0.65% to RM1.54.
