This article first appeared in Capital, The Edge Malaysia Weekly on January 19, 2026 - January 25, 2026

Target price: RM12.70 BUY

Target price: RM9.50 BUY

Target price: RM5.60 BUY

HONG LEONG INVESTMENT BANK RESEARCH (JAN 12): Malaysia’s banking sector outlook remains constructive for 2026, premised on a resilient domestic economy and enhanced shareholder returns. We project steady system loan growth of 4.8% to 5.3% year on year (y-o-y) for 2026, supported by our 4.5% in-house gross domestic product (GDP) forecast, the Visit Malaysia 2026 campaign and the RM50 billion in SME fiscal support.

While export normalisation remains uncertain, banks’ earnings visibility is bolstered by stabilising NIMs (net interest margins) and robust NOII (non-interest income) momentum. Also, capital management serves as a primary catalyst, with sector-wide DPR (dividend payout ratio) increases potentially driving yields up to 6.5%, by our estimates.

Despite the recent share price strength, the sector valuation remains undemanding, trading at 0.95 times P/B, which is below the pre-Covid mean of 1.21 times. We continue to advocate a broad-based buying strategy, while nominating Malayan Banking Bhd (KL:MAYBANK), CIMB Group Holdings Bhd (KL:CIMB) and Alliance Bank Malaysia Bhd (KL:ABMB) as our top picks for the first half of 2026 (1H2026).

At our RM12.70 target price, we value Maybank at an implied 1.53 times P/B. We believe this premium is warranted given Maybank’s extensive regional footprint, undisputed leadership in the domestic market and position as the sector’s highest dividend payer. Notably, Maybank was the sole lender under our coverage to effectively preserve its NIM during the volatile 3Q2025 period, while its peers grappled with margin compression following the July 2025 OPR (overnight policy rate) cut.

Despite our revised RM9.50 target price implying 1.37 times P/B, we believe this multiple is well-justified. As the second largest bank in Malaysia with a regional footprint comparable to Maybank, CIMB is now delivering a higher ROE. Furthermore, its dividend profile has become increasingly attractive, with a projected yield of over 6% — it stands out as an undemanding large-cap pick following its commitment to a capital reduction programme of up to RM2 billion by 2027.

Our revised RM5.60 target price values Alliance at two standard deviation above its five-year mean, positioning it slightly above the sector average of 0.85 times P/B. We believe this premium is justified by its superior ROE generation, which currently tracks one percentage points higher than its five-year historical average. Alliance continues to outperform in loan market share acquisition, particularly within the SME space. Furthermore, we are positive on potential merger and acquisition news flow as a share price catalyst, specifically following reports in late 2025 that DBS Group had recalibrated its proposal to acquire a 30% stake in the bank to align with Malaysian regulatory thresholds.

We also have “buy” ratings on Affin Bank Bhd (KL:AFFIN) (RM3 target price); AMMB Holdings Bhd (KL:AMBANK) (RM7.20 target price); Public Bank Bhd (KL:PBBANK) (RM5.30 target price); and RHB Bank Bhd (KL:RHBBANK) (RM8.80 target price). We maintain our “hold” call on Bank Islam Malaysia Bhd (KL:BIMB) (RM2.40 target price), given its limited upside.

Target price: RM6.31 BUY

MAYBANK INVESTMENT BANK GROUP RESEARCH (JAN 12): SD Guthrie Bhd (KL:SDG) has announced more than 10 memorandums of understanding (with two sale and purchase agreements signed) on over 15,000 acres of land for industrial park development. This helps provide earnings visibility to achieve its RM500 million to RM700 million per annum recurring income from the new venture.

Recently transacted prices of agriculture land in Johor, Selangor and Negeri Sembilan have beaten our estimates. This has prompted us to conservatively raise our average land value estimates by 20% each for Selangor to RM6 per sq ft, Negeri Sembilan to RM2.40 psf; and Johor to RM1.80 psf, which lifts our RNAV to RM11.47 per share.

We now attach a higher price to our land values, which was last revalued in 2017 (at listing). SDG remains a “buy” with a higher target price of RM6.31 (from RM5.75) on unchanged 0.55 times RNAV.

Upside factors include SDG monetising part of its strategic land bank to unlock value either as one-off transactions or partnering potential partners for industrial park developments to further enhance shareholders’ value, better-than-expected crude palm oil (CPO) price or output growth. Downside factors include government policy changes that may ultimately impact CPO pricing.

Target price: RM1.42 BUY

RHB RESEARCH (JAN 12): KKB Engineering Bhd (KL:KKB)’s oil & gas fabrication arm OceanMight received a letter of award from Petronas Carigali for the provision of minor EPC (engineering, procurement and construction) works on fixed offshore structures and a host tie-in at Erb West for the Belud South Greenfield Development (GFD) project. The RM212 million job is expected to be completed within 13 months from Jan 15, 2026.

As at end-4Q2025, KKB’s outstanding order book stood at RM55 million (end-3Q2025: RM85 million). We estimate the group’s current tender book for engineering, construction and manufacturing to be around RM700 million.

We pared down FY2025-2027F earnings by 14%, 4% and 13% as we reflected FY2025’s situation, which saw no new job wins (versus our previous target of RM100 million). We arrive at a new target price of RM1.42 by pegging our FY26F EPS to an unchanged target PER of 17 times, and applying a 2% ESG premium to the stock’s intrinsic value. KKB’s target PER is near the Bursa Malaysia Industrial Production Index’s 10-year mean. This is justified by its position — it could benefit from Sarawak’s higher allocation of RM6 billion for 2026 (2025: RM5.9 billion) under Budget 2026.

Target price: RM2.70 BUY

CIMB SECURITIES RESEARCH (JAN 9): Resorts World New York City (RWNYC) successfully secured a Downtown New York (DNY) commercial casino licence — with an upfront fee of US$500 million for 15 years, renewable for 10 years — and will start work on the first phase by 2Q2026, which is at least four years ahead of new DNY casinos.

We cut our FY2026F core EPS forecast by 8%, mainly to factor in higher interest cost on debt raised by RWNYC to pay the upfront licence fee and initial phase capex, but raised our FY2027F core EPS estimate by 25% on full-year impact from table games operation and an increase to 400 tables in January 2027. We expect Genting Malaysia Bhd’s (KL:GENM) core EPS to dip slightly by 1% y-o-y in FY2026F before surging 39% y-o-y in FY2027F.

We upgrade GENM to a “buy” from “hold” with 6% higher SOP-based target price of RM2.70. We acknowledge that GENM’s share price may take some time to re-rate as investors could stay on the sidelines until it delivers strong core EPS growth in FY2027F, driven by RWNYC. Moreover, we expect zero DPS over FY2025–2027F, assuming GENM will conserve cash to reduce debt and partly fund RWNYC’s expansion.

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