MBSB Research and HLIB maintained their BUY calls on Capital A Bhd despite cutting their target prices to RM0.53 and RM0.69 respectively following weaker-than-expected 2QFY26 results. MBSB Research lowered its target from RM0.63 while HLIB cut its target from RM0.76, with both citing softer earnings and near-term pressure across several businesses.
Capital A recorded 2QFY26 core net profit of RM33.2 million, taking first-half earnings to RM60.1 million, below MBSB Research’s and consensus’ full-year expectations at 38% and 33% respectively. HLIB reported a similar first-half core profit figure of RM57.8 million.
The group’s revenue nevertheless jumped 91.5% year-on-year in the quarter, while EBITDA swung to a positive RM108.5 million from a loss of RM112.5 million previously. Teleport revenue rose 22.1% on higher volumes and improved yields, while Asia Digital Engineering (ADE) revenue increased 29.3%, supported by a higher-value work mix.
However, Santan remained a drag, with revenue falling 13.3% and EBITDA plunging 81.9% following airline capacity and network reductions. AirAsia MOVE also saw weaker margins amid higher costs.
MBSB Research expects 3QFY26 to be softer due to seasonality and capacity constraints, while HLIB sees a stronger 4QFY26 supported by peak air travel and e-commerce demand.
Both houses remain positive on the longer-term recovery, with ADE benefiting from fully booked hangar capacity and Teleport positioned for network expansion and peak e-commerce demand.
As of 3.17 pm, the stock price gained 3.03% to RM0.34.
