Ibraco set for stronger 2H25 on industrial push, township progress
Analysts expect Ibraco Bhd’s earnings to rebound in the second half of 2025 (2H25), lifted by margin recovery and the launch of its new industrial development at Demak Laut.
TA Securities said Ibraco’s entry into the light industrial segment will tap rising demand from SMEs and logistics players, creating a more resilient earnings base alongside its township projects.
“Furthermore, its unbilled sales of RM302 million and a construction order book of RM879 million underpin near-term earnings visibility.
“Key drivers include steady progress at The NorthBank and Arden City townships in Sarawak, as well as the West Malaysia project, Residensi NewUrban in Petaling Jaya,” it said in a note on Monday.
In its filing, Ibraco said it will expand further into the light industrial sector in 2H25 to meet rising demand for scalable and adaptable industrial spaces.
The group is leveraging 23.1 acres of land within the Demak Laut Industrial Zone to offer flexible lot configurations for SMEs, logistics providers and light manufacturers.
TA Securities added that its construction division continues to benefit from government infrastructure rollouts, while vertical integration via quarry, concrete, asphalt and pipe manufacturing will improve cost efficiency and margins.
“The new quarry at Gunung Sinmajau, commencing in 2H25, should further strengthen self-sufficiency in building materials,” it added.
To recap, Ibraco posted 1H25 core net profit (CNP) of RM23.9 million, excluding RM20.2 million in compensation from compulsory land acquisition.
The results were in line with expectations, making up 44 per cent of TA Securities’ full-year forecast.
CNP surged 107 per cent year-on-year to RM23.9 million, supported by stronger contributions from the construction division as several Sarawak infrastructure projects advanced.
However, quarter-on-quarter, 2Q25 CNP fell 24 per cent despite a 5 per cent revenue increase due to margin compression in both property and construction divisions as operating costs rose.
The group said it remains optimistic about Malaysia’s economic recovery in 2025 and is confident of its resilience despite a subdued property market and rising cost of living.
“The recent 25-basis-point reduction in the Overnight Policy Rate by Bank Negara
Malaysia has eased pressure from previously elevated interest rates, contributing to improved market sentiment and more accommodative financing conditions,” said the group.
All told, TA Securities has maintained a ‘buy’ call on the stock as it is optimistic on Ibraco’s strong foothold in Sarawak that continues to support property sales and secure construction projects with above-average margins.
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