MGB Bhd remains a BUY for RHB Investment Bank with a SOP-derived target price of RM0.63, implying 51% upside and an estimated 8% FY27 dividend yield, after its first-half 2026 core profit stayed in line with the research house’s expectations despite falling short of consensus.
MGB’s first-half core profit rose 15% year-on-year to RM27 million, accounting for 50% of its full-year forecast but 47% of Street estimates. It maintained its earnings forecasts and target price, citing steady progress across Rumah Selangorku Idaman projects and a broader property pipeline with combined gross development value exceeding RM1 billion.
The construction arm delivered second-quarter profit before tax of RM10.6 million, up 19% year-on-year, supported by cost optimisation and a smaller loss from its Saudi Arabian operations. Its property development arm also posted RM10.6 million in profit before tax, up 16.5%, helped by the release of unused accrued costs from projects whose defect liability periods had ended.
MGB’s outstanding orderbook stood at around RM1.68 billion at end-June, up from RM1.07 billion a year earlier. Year-to-date job wins reached RM274.7 million against RHB’s FY26 target of RM800 million, while its Saudi tenderbook stands at around SAR800 million.
RHB said Saudi Arabia’s construction pipeline remains encouraging despite Middle East tensions, with SAR29.5 billion of new projects awarded in June.
The research house sees MGB’s valuation as undemanding at four times FY27 earnings, around one standard deviation below its five-year average, while faster development of the Kertih Terengganu Industrial Park and securing Johor Bahru construction jobs could provide further catalysts.
The stock price rose 3.61% to RM0.43 as of 10.33 am.
