This article first appeared in Capital, The Edge Malaysia Weekly on August 17, 2026 - August 23, 2026

Target price: RM1.80 BUY (initiation)

AMINVESTMENT BANK RESEARCH (AUG 10): The post-pandemic spending spree has led to visible cost-of-living pressures on Malaysian households which are turning increasingly price-sensitive, and Eco-Shop Marketing Bhd (KL:ECOSHOP) — the largest fixed-price retailer — is the most direct listed beneficiary. Its flat RM2.60 ticket sits on a defensive staples core with a discretionary tail that lifts basket size. It has a long store runway and a gross margin re-rating from about 20% in FY22 to about 33% in FY26 underpinning a core earnings CAGR of around 20% over FY26 to FY29F, the fastest among Bursa Malaysia-listed retailers.

We initiate with a “buy” call and target price (TP) of RM1.80 by pegging a 27.5 times target price earnings (PE) to FY28F core EPS of 6.6 sen, which is in line with Eco-Shop’s average PE.

Management targets 100 gross store openings a year and our store-density work points to a healthy runway before saturation. Malaysia runs at around 54,000 population per dollar store against around 31,000 across developed peers (ex-Japan and the US), while Eco-Shop’s own network averages about 70,000, leaving Central (77,000) and especially Sabah and Sarawak (143,000) visibly underserved — and this is where the bulk of the rollout is directed.

Overlap is limited, where only about 50% of stores sit within 3km of another outlet, so we expect cannibalisation to stay subdued. The distribution centre pipeline, set to exceed more than double the throughput by 2029, supports the rollout through to FY34.

At RM2.60, Eco-Shop undercuts MR DIY Group (M) Bhd (KL:MRDIY), 99 Speed Mart Retail Holdings Bhd (KL:99SMART) and even Shopee on like-for-like items.

Gross margin rose from about 20% in FY22 to 33% in FY26, on scale-driven supplier rebates and deeper own-brand mix. We forecast 33% to 34% from FY27F onwards, as guided by management.

Similarly, Ebitda margins rose to 13% in FY26 (11% in FY25) even after the internal minimum wage rose to RM1,800 (from RM1,500). Cost sensitivity is modest (a 5% move in raw material costs, including foreign exchange, moves gross margin by about 1%). Refurbishments (more than 10% sales uplift) and membership conversions (2.5 to 3 times larger basket sizes) provide further structural upside, while the easing in commodity and freight costs is incremental to our numbers.

Target price: RM3.80 BUY (maintained)

PHILLIP RESEARCH (AUG 11): MN Holdings Bhd (KL:MNHLDG) announced that its wholly-owned subsidiary, MN Utilities Engineering Sdn Bhd (MNUE), has secured a RM122.3 million contract from Tenaga Nasional Bhd (KL:TENAGA) via an 80:20 joint venture with Pembinaan Tajri Sdn Bhd. The contract covers engineering, design, supply and erection works for a new 132kV underground cable system. The project commenced in August and is expected to be completed by November 2027.

This marks MN’s maiden contract win in FY27, accounting for 8% of our RM1.3 billion order replenishment assumption and extending earnings visibility into FY28. The award reinforces our view of a growing opportunity under Tenaga’s Regulatory Period 4 capex cycle, with the utility company accounting for 64% of MN’s RM3.7 billion tender book as at May 2026. Assuming a 7% net margin, we estimate the contract to contribute RM7 million profit after tax.

We maintain “buy” with a higher TP of RM3.80 as we raise our FY27-FY28E earnings by 10% to 17% after revising our annual order book replenishment assumption to RM1.3 billion (from RM1 billion previously).

Subsequently, we revise our 12-month TP to RM3.80 (from RM3.35) based on an unchanged target 20 times PE multiple on fully diluted CY27 EPS.

Target price: RM1.09 BUY (maintained)

MBSB RESEARCH (AUG 11): Hup Seng Industries Bhd’s (KL:HUPSENG) results for the first half of the financial year 2026 (1HFY26) reflected steady earnings growth, supported by lower input costs and stronger export demand, despite softer domestic sales. For 1HFY26, revenue was broadly flat at RM177.2 million (+0.4% year on year), while core profit after tax and non-controlling interests rose +10.3% y-o-y to RM21.3 million, broadly in line with expectations, accounting for 44% of our full-year forecast but 41% of consensus’.

We expect 2HFY26 performance to be slightly stronger, supported by year-end festive demand.

We remain positive on the group’s defensive staple-food exposure, healthy balance sheet and dividend appeal, and make no change to our earnings forecasts and retain our DDM-based TP of RM1.09, premised on a 3% dividend growth assumption and 9.1% weighted average cost of capital.

By segment, biscuit manufacturing revenue rose +3.9% y-o-y to RM65.6 million in 2QFY26, while operating profit improved 56.3% y-o-y to RM8.8 million, with margin expanding to 13.5%.

Trading revenue was broadly stable at RM67.6 million (-0.9% y-o-y), while operating profit declined by 8.2% y-o-y to RM5.8 million. Beverage manufacturing remained small, with a revenue of RM1.2 million and a marginal operating loss of RM100,000.

Target price: 23 sen BUY (maintained)

RHB RESEARCH (AUG 10): We expect Econpile’s 4QFY26 core net profit to fall within RM200,000 and RM500,000, compared with 4QFY25’s core earnings of RM8 million. This may be mainly due to the higher prices of materials like diesel (with the Brent crude oil price reaching as high as US$118 per barrel late April). Taking this into account, we project its FY26 core earnings to be RM3.7 million to RM4 million.

We estimate Econpile’s latest outstanding order book to stand at about RM570 million after taking into account the latest RM39.5 million job win for a commercial development in July, compared with RM498 million as at end-4QFY25. Its FY26 new job wins stood at around RM404 million (slightly above its target of RM400 million for FY26).

Looking ahead, new contract wins and bids are likely to be priced at better margins (as it factors in current material price trends).

We cut FY26-FY28F earnings by 12%, 14% and 10%, respectively, on now-lower margin assumptions. As a result, we also trim our TP to 23 sen — derived by pegging a revised 0.9 times (from 1.2 times) target P/B value to FY27F book value per share, and ascribing a 6% ESG discount on its intrinsic value. The lower target P/B value is at -0.5 standard deviation from the stock’s 10-year P/B value mean — which we view as justified.

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