KUALA LUMPUR (Nov 18): Aquawalk Group Bhd’s "exceptional" profit margin has drawn the attention of Apex Securities to initiate coverage of the operator of Aquaria KLCC ahead of its Wednesday listing.
The company's net margin has remained consistent at around 35% in the past two years and will remain stable through 2027, the research house said in rating the stock as a ‘buy’. Apex Securities’ target price is 51 sen, an upside of nearly 65% from the initial public offering price (IPO) of 31 sen per share.
Earnings growth is expected to be driven by the Visit Malaysia 2026 campaign, potential increase in ticket prices as well as income from ongoing upgrade and expansion plans, Apex Securities said in a note.
Investors have snapped up Aquawalk’s shares, oversubscribing to its public tranche by about six times. Aquawalk sought to raise nearly RM230 million from the IPO, with half of the proceeds going to the company to upgrade existing attractions and develop new oceanariums.
Apart from its flagship Aquaria KLCC, the company also owns Aquaria Phuket, the biggest aquarium exhibit in Thailand, and a 40% stake in Jakarta Aquarium & Safari in Indonesia.
Visit Malaysia Year 2026 will attract more international visitors and stimulate domestic spending, positioning Aquaria KLCC to capture rising tourist arrivals and drive earnings growth, Apex Securities said.
There is also a wide gap in ticket prices between Aquaria KLCC and the Singapore Oceanarium, which highlights untapped revenue potential, the research house said. “Given the group’s high operating leverage, any uplift in ticket prices would translate directly into earnings,” the house noted.
Upgrades including a new penguin exhibit targeted to open in the second half of 2026 could allow Aquawalk to raise the ticket prices of Aquaria KLCC by about 10%, the house flagged.
All in all, net profit at Aquawalk could see an average annual growth of about 14% through 2027, according to Apex Securities’ estimates. The solid earnings visibility could also support a dividend payout of 30% of its net profit, which translates into a yield of 2%-3% based on the IPO price.