JHM Consolidation has retained its BUY call from RHB Investment Bank Bhd (RHB Research), with the target price raised to RM0.64 from RM0.50, implying 39% upside and around 2% FY27 dividend yield as the research house expects FY26 to mark a turnaround year for the group.
RHB said the recovery will be driven by its automotive lighting business, growth in the semiconductor-focused sheet metal division and improving performance from loss-making subsidiaries. It expects 2Q26 earnings to improve quarter-on-quarter to RM4 million to RM6 million, supported by stronger project activity, solid orderbooks and more stable foreign exchange rates.
The group’s core profit after tax and minority interest reversed to RM2.3 million in 1Q26 from a RM2.2 million loss a year earlier, helped by higher automotive project volumes and industrial orders despite elevated input costs. RHB said JHM is targeting 20% to 30% revenue growth in FY26 with a 4% to 6% net margin.
The automotive segment is gaining traction through delayed projects for a major customer and a new US$25.9 million contract from Magna Autosystems. New Proton models using the advanced modular architecture are expected to contribute RM50 million to RM55 million annually, while another model planned for 2027 could add RM15 million to RM20 million a year.
Meanwhile, sheet metal revenue is expected to grow 15% year-on-year and contribute RM7 million to RM10 million to FY26 earnings as demand from semiconductor and industrial clients remains firm.
RHB said JHM trades at 17 times FY26 earnings, leaving room for a valuation re-rating as earnings delivery becomes more consistent.
As of 11.13 am, the stock price rose 1.05% to RM0.48.
