Malaysian Resources Corporation Bhd (MRCB) is expected to face continued earnings pressure in the near term as recently secured projects take time to contribute meaningfully, according to Hong Leong Investment Bank Bhd (HLIB Research).
HLIB Research said MRCB recorded a 2Q26 core net loss of RM61.5 million compared to a RM15.1 million core profit a year earlier, while revenue fell 41% year-on-year to RM174.5 million. The weak quarter pushed 1H26 core losses to RM58 million.
The research house attributed the decline mainly to a 60% drop in construction revenue after the LRT3 project reached full completion, while newer jobs were still at early stages of execution. Higher operating and finance costs added to the pressure.
Despite the weak earnings, HLIB Research noted that MRCB’s outstanding construction orderbook stands at RM8.5 billion, led by the KSSA redevelopment, LRT3 reinstatement works and Penang LRT Systems package. However, the research house expects construction earnings to stay subdued over the coming quarters as these projects ramp up gradually.
Property earnings are also expected to remain soft in FY26, with most of MRCB’s RM1.5 billion unbilled sales tied to Australian projects that will only be recognised upon handover from FY29.
HLIB Research now expects MRCB to post a core net loss of RM54 million in FY26 and has reduced its FY27 and FY28 earnings forecasts by 29% and 21%, respectively.
The research house downgraded MRCB to ‘Hold’ from ‘Buy’ and cut its target price to 28 sen from 50 sen, citing limited near-term catalysts and a slower earnings recovery.
