RHB Investment Bank has raised its target price for SumiSaujana Group Bhd to 14 sen from 13 sen and maintained its “Buy” recommendation, citing improving margins and stronger-than-expected earnings performance. The new target price implies a potential upside of 47.4% from the stock’s current trading price of 9.5 sen.
The oil and gas specialty chemicals manufacturer reported core earnings of RM7 million for the first half of FY2026, representing a 40.2% year-on-year increase and accounting for about 60% of both RHB’s and consensus full-year forecasts.
RHB said the earnings beat was primarily driven by a recovery in margins, supported by pricing adjustments, a more favourable product mix and continued cost optimisation initiatives. Revenue for the second quarter rose 22.3% year-on-year to RM45.1 million, while core net profit more than doubled to RM4.9 million from RM2.3 million a year earlier.
Following the stronger-than-expected results, RHB increased its FY2026 earnings forecast by 19.1% after raising its gross profit margin assumptions, noting that margin recovery has materialised earlier than anticipated.
The research house remains constructive on the outlook for the oil and gas sector, supported by resilient upstream activities across the Asia-Pacific region, steady energy demand and continuing capital expenditure by regional oil majors and national oil companies. Sumisaujana is also expected to benefit from higher sales contributions from Malaysia and the United States, alongside ongoing procurement and cost management initiatives.
Over the longer term, RHB believes the group’s expanding customer base, growing export footprint and increasing focus on higher-value specialty chemical products will support both earnings growth and margin expansion. The company currently serves customers across the Asia-Pacific, Middle East, Africa, Europe and the Americas.
RHB forecasts recurring net profit to rise from RM14 million in FY2026 to RM23 million in FY2027, representing growth of more than 60%, while maintaining a net cash position. The valuation is based on 11 times mid-CY2027 earnings, which RHB said remains at a discount to global oil and gas services peers.
