$MFCB / 3069 (MEGA FIRST CORPORATION BERHAD)
Research by PIB
Outperform – TP of MYR 5.36

“A Decent Start”

Stripping out i) gain on foreign exchange (RM3.3m), ii) insurance income for packaging assets damaged by fire incident in 2023 (RM22.3m), iii) unexpected one-off losses incurred by JV-owned Edenor (RM13.9m) and iv) minority interests (RM12.5m), the Group kick started 1QFY24 with core earnings of RM97.4m, up 22.5% YoY. The stronger results were broadly in line with our and consensus full-year expectations, making up 21.4% and 21.7%, respectively. It is worth noting that the renewable energy segment, which contributed 88% to the Group’s bottomline, saw a decline in the average Equivalent Availability (EAF) from 81.9% to 79.3% while there was a 1% adjustment in hydro tariff since 1st Oct 2023. Maintain Outperform with an unchanged SOP-based TP of RM5.36 nonetheless. No dividend was declared for the quarter. Key re-rating catalysts include i) a more favourable power purchase agreement, which is being finalized soon and ii) maiden contribution from the 40%-owned modern farming business.

Analyst(s):
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my