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- The research house said PGF’s weak share price performance is mainly due to delays caused by unresolved water supply issues, which have prevented the Tanjung Malim property development from starting.
KUALA LUMPUR (Jan 9): TA Securities expects PGF Capital Bhd (KL:PGF) to resolve the long-standing issues at its Tanjung Malim property project by the financial year ending Feb 28, 2027 (FY2027).
The company plans to develop its land near Proton City in Tanjung Malim into a large township over 10 to 15 years. The project will cover over 400 acres, including more than 6,000 homes and commercial units, and has an estimated gross development value (GDV) of RM3 billion, according to its latest annual report.
The research house said PGF’s weak share price performance is mainly due to delays caused by unresolved water supply issues, which have prevented the Tanjung Malim property development from starting.
The stock is down 14.95% over the last one-year period, trading at RM1.82 a share earlier on Friday. The company is valued at RM354.96 million.
“We believe PGF can recover and return to the growth trajectory once it obtains the development approval this year,” the house said in a note on Friday.
PGF is preparing to submit a water concept plan that could enable Phase 1 of the project to start in FY2027. This will require an investment of RM5 million to RM6 million to install water pipes, completing the final infrastructure needed. Once the water issue is resolved, PGF can submit its housing development plan, which is expected to be approved within about six months.
This would put Nexel Group, PGF’s 50.1%-owned joint venture, on track to launch Phase 1 of the project in FY2027, with an estimated GDV of RM300 million.
“All in all, the property development in Tanjung Malim is also important, besides glass wool insulation, to the group’s future profitability and share price performance, we reckon. The successful launch of the project would enable PGF to capitalise on the cheap land cost and recognise the tax credit, which will boost its profit margins and cash flow,” TA Securities said.
Based on the company's FY2025 account, the carrying value of the land was RM168 million or RM2.94 psf. The house said this is relatively cheap if compared to the current selling price of about RM45 psf.
TA Securities added that PGF could recognise a land sale gain of about RM21 million once the project achieves an 80% take-up rate, which it expects could occur in FY2028. The successful launch would allow the group to monetise its land bank acquired at relatively low cost.
TA Securities expects PGF Capital’s 3QFY2026 profit to be roughly flat compared to RM5.9 million in 2QFY2026 on continued demand for its glass wool insulation products in Australia.
The company is expected to release its results by the end of the month.
The research house has a ‘buy’ call and a target price of RM2.92 for the stock.
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