This article first appeared in Capital, The Edge Malaysia Weekly on December 15, 2025 - December 21, 2025

SHARE prices fall for various reasons, from poor market sentiment that has nothing to do with the companies themselves to business or operational issues that cause investors to dispose of their holdings. The Edge looks at six stocks whose prices have declined considerably this year. What caused the sell-downs and will the share prices improve? Are the companies expected to do better from an operational standpoint?

Malakoff Corp Bhd (KL:MALAKOF) is principally engaged in independent water production; power generation; renewable energy; solid waste collection and management; and public cleansing services. The company was listed on May 15, 2015.

Its share price has weakened on the back of a sharp earnings deterioration in its third quarter ended Sept 30, 2025 (3QFY2025), which saw core profit plunge 55% quarter on quarter (q-o-q) following an unplanned outage at its Tanjung Bin Energy plant due to leakage of a steam turbine crossover pipe.

The situation worsened in October as a failure in the flue gas desulphurisation (FGD) system forced a prolonged shutdown, prompting research houses to slash their earnings forecasts. For example, Kenanga Research cut its FY2025 earnings forecast by up to 36%.

Both factors contributed to Malakoff’s earnings weakness, with multiple research houses revising down their FY2025 projections. Apex Securities expects a full operational recovery by end-December 2025, restoring capacity payments and margins.

Malakoff’s trailing 12-month (TTM) dividend per share of 3.7 sen implies a yield of 4.4% at last Wednesday’s closing price of 84 sen. The dividend payout ratio of 118.7% suggests that the distribution is supported primarily by operating cash flow rather than earnings.

Analysts have mixed views on Malakoff owing to the uncertain recovery timeline. Of the 11 research houses tracked by Bloomberg, there are six “buy”, two “hold” and four “sell” calls, with target prices ranging from 74 sen to RM1.29, arriving at a consensus of 99 sen, indicating an upside potential of 17.85% from the closing price of 84 sen last Wednesday.

Mega First Corp Bhd (KL:MFCB) is principally involved in building, owning and operating renewable energy power plants; quarrying of limestone; manufacturing and trading of lime products and calcium carbonate powder; and manufacturing and distributing flexible packaging materials, paper bags, flexible packaging and labels.

The softness in MFCB’s share price reflects foreign exchange volatility, weaker resource demand and continued losses from its oleochemical joint venture. The group’s earnings are highly sensitive to US dollar movements as its hydro business via Don Sahong Hydropower Plant (DSHP) in Laos is denominated in the currency. Management estimates that every 10 cent depreciation in the US dollar reduces its earnings before interest and taxes (Ebit) by about 2%.

For MFCB’s third quarter ended Sept 30, 2025 (3QFY2025), net profit rose 42.6% q-o-q to RM120.9 million, supported by stronger hydropower output during the monsoon season. However, the Edenor Oleo JV remained loss-making because of weak industry conditions.

For 9MFY2025, core profit slipped 2.3% year on year (y-o-y) to RM325.5 million, meeting only 70% to 74% of full-year expectations. Renewable energy earnings were held back by currency translation and lower tariffs while the resources division posted a y-o-y revenue decline of 21.3% on subdued lime demand.

Public Investment Bank Research expects solar earnings to remain steady in 4QFY2025, with two new solar projects set to lift installed capacity and support medium-term growth. Earnings per share (EPS) is expected to stabilise and grow consistently until FY2027F.

Analysts’ views on MFCB are mixed, with two “positive” and two “neutral” ratings. Their target prices range from RM3.42 to RM5.39, with a consensus of RM4.49, implying an upside potential of 42% from the current level.

IJM Corp Bhd’s (KL:IJM) core business activities encompass construction, property development, manufacturing and quarrying, infrastructure concessions and plantations in Malaysia and abroad.

Its share price has been relatively soft in recent months, reflecting its flattish financial performance in the first half of FY2026 ended Sept 30, 2025 (1HFY2026), which saw net profit unchanged at RM161.4 million.

Several analysts viewed the results as below expectations, due to weaker property earnings and softer port contributions. Hong Leong Investment Bank Research assessed the performance as broadly within its projections, noting that much of the weakness had already been anticipated.

Nevertheless, analysts remain broadly positive on IJM’s medium-term trajectory. Its outstanding order book stands at RM8.4 billion — or RM14.4 billion including that of associate companies — supported by RM5.3 billion in new wins year to date.

According to RHB Research, data centre (DC) projects now account for 44% of IJM’s order book. With management actively tendering for additional DC and industrial contracts, many see these as key catalysts for a stronger 2H2026.

Sector visibility has improved following the tabling of the 13th Malaysia Plan (13MP), which allocates RM430 billion to development expenditure from 2026 to 2030. With RM1.6 billion in unbilled property sales and an anticipated rebound in port operations, analysts expect improving earnings momentum for IJM in FY2026 and FY2027.

According to Bloomberg data, 11 research firms expressed positive views while five were neutral on the group’s prospects, with their target prices ranging from RM2.60 to RM3.60, with a consensus of RM3.27.

Sime Darby Bhd (KL:SIME) is primarily involved in the assembly, sale and rental of vehicles; the provision of after-sales services; the sale, rental and servicing of equipment and engineering services; the import, assembly and marketing of vehicles; the trading and leasing of equipment; and the manufacturing, assembly and trading of automotive parts.

Sime Darby’s share price has softened despite its operational stability, reflecting concerns about its motor and industrial divisions. For its first quarter ended Sept 30, 2025 (1QFY2026), core net profit declined 33.8% q-o-q as the industrial division faced delayed equipment deliveries and slower after-sales contributions in Australia.

Analysts note the impact of a weaker AUD/MYR exchange rate and normalisation of parts margins on near-term profitability. The Australian currency is down 1.55% year to date.

Despite these challenges, the broader outlook remains constructive. Public Investment Bank Research expects earnings to stabilise as China’s pricing environment shows early improvement while Malaysia’s automotive segment benefits from healthy order books. Sime Darby’s motor division is further supported by new model launches and easing discount pressures. Steady-performing subsidiaries, including UMW, act as a stabilising anchor to the group’s earnings.

Valuation-wise, Sime Darby remains attractive, with its shares trading below the historical average. Its TTM dividend payout ratio of 59% and yield of 7.5% indicate the company is retaining earnings for growth while providing strong cash returns relative to its current share price.

Analysts’ sentiment over the past three months has been slightly positive, with six “buy”, seven “hold” and two “sell” recommendations, according to Bloomberg. Their target prices range from RM1.90 to RM2.40, with an average of RM2.11, suggesting upside potential from the current level.

PETRONAS Dagangan Bhd (KL:PETDAG) is a retailer and marketer of downstream oil and gas products. It is the principal domestic marketing arm of Petroliam Nasional Bhd (PETRONAS).

The company’s share price has softened, reflecting investor concerns about margin compression in both its retail and commercial segments.

CGS Research highlights that commercial profitability was pressured as prices of Mean of Platts Singapore (MOPS) jet fuel rose q-o-q, squeezing spreads, while the retail division faced softer earnings due to negative timing effects, where inventory purchased at higher prices was sold amid a declining oil price environment.

Despite these near-term pressures, the company’s core fundamentals remain intact. Sales volumes rose 4% q-o-q, supported by higher average selling prices across the retail and commercial segments, led by diesel and jet fuel demand.

Kenanga Research notes that the transition to the targeted fuel subsidy mechanism is expected to have minimal operational impact. Meanwhile, MBSB Research retained its FY2025 to FY2027 earnings forecasts, citing 9MFY2025 contributions as within expectations. The company is actively expanding its non-fuel businesses, including new energy and green fuel initiatives, supporting a higher valuation for its operations.

Valuation-wise, PetDag’s shares are trading below the medium-term average PER and supported by a decent 12-month trailing dividend yield of 4.5%.

Analysts’ views on the counter have been slightly positive over the past three months, with two “buy”, six “hold” and two “sell” recommendations, according to Bloomberg. Their target prices range from RM16.77 to RM25.19, with 12-month consensus of RM21.76, suggesting upside potential from the current level.

D&O Green Technologies Bhd (KL:D&O) is involved in the manufacturing of semiconductor components and LED products for the automotive industry.

The weakness in the company’s share price in recent months has been driven by a significant 3QFY2025 earnings disruption, largely due to a RM250 million inventory impairment arising from a stricter inventory clean-up exercise.

According to Kenanga Research, the impairment stemmed from legacy automotive LED stock, ageing materials and overly stringent testing thresholds introduced since 2021. The adjustment resulted in a headline quarterly loss, although Phillip Research noted that after stripping out exceptional items, 9MFY2025 core earnings of RM41 million met 107% of its earlier full-year forecast and 152% of consensus.

Analysts generally characterise the impairment as non-cash and one-off, with Public Investment Bank Research expecting at least 50% of the impaired value to be written back over the next few years. Sequentially, core profit improved 104% q-o-q to RM26 million, supported by its utilisation rate rising to 70% from 65% previously.

Phillip Research expects margins to improve further, having raised its FY2025 to FY2027 earnings per share (EPS) forecasts by 41% after better-than-expected 9MFY2025 profitability. Kenanga Research, however, maintains a more cautious near-term view, citing softer automotive demand and gradual recovery tied to new design wins and smart lighting programmes.

Analysts’ views of the stock have been slightly muted over the past three months, with five “hold”, one “sell” and one “buy” recommendations. Their target prices range from 77 sen to RM1.23, with with a consensus of 94 sen, suggesting upside potential from the current level. 

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