30 Apr 2025 Tax incentive a positive for PGF Capital
PETALING JAYA: The approval obtained by PGF Capital Bhd for a Northern Corridor Economic Region (NCER) tax incentive is a shot in the arm for the group, analysts say.
TA Research said, overall, it views this as a mid-to long-term earnings driver, which would uphold the profit margin for the group as a whole.
The new plant in Kulim East Industrial Park, Kedah, is expected to begin commercial operations in the first half of next year, and will produce mineral wool sandwich panels for the building industry.
“In our calculations, the total tax savings would amount to RM86.2mil over a period of 10 years,” the research house said.
PGF Capital announced that it had recently received formal approval for the NCER tax incentive, granting it five plus five years of corporate tax exemptions.
According to management, the tax holiday would begin when its new plant ramps up its production to 30% of the installed capacity.
With regards to the reversal of an impairment loss on PGF Capital’s land in Tanjung Malim, Perak, the research house said the group is now revaluing the land to an average of RM2.90 per square foot (psf) from RM2.57psf previously, based on a carrying amount of RM167.5mil.
This was still a significant discount to the current market price of an estimated RM40psf to RM45psf.
The research firm is maintaining its sum-of-parts valuation for PGF Capital at RM3 per share, as well as maintaining its “buy” call on the company.
The company posted a net profit of RM13.9mil for its fourth quarter ended Feb 28, 2025 (4Q25), versus a net loss of RM1.8mil a year earlier. Revenue rose slightly to RM33.69mil from RM33.34mil previously.
For its full financial year, PGF Capital’s net profit jumped to RM33.9mil from RM10.5mil in FY24. Revenue for the period stood at RM155.02mil from RM128.64mil in FY24.
PGF Capital has proposed a final dividend of one sen per share for FY25, pending shareholder approval at the upcoming AGM.
This follows the first interim dividend of two sen per share already distributed, bringing the total dividend for FY25 to three sen per share and a total payout of RM5.8mil.
PGF Capital, formerly known as Poly-Glass Fibre Bhd, and its subsidiaries are involved in manufacturing of glass mineral wool insulation and property development.
The group is a leading insulation producer in South-East Asia with an annual installed capacity of 25,000 tonnes.
Approximately 70% of its products are exported overseas, mainly to Australia and New Zealand.
Meanwhile, its property development arm PGF Capital owns 1,311.15 acres of leasehold land named Diamond Creeks Country Retreat in Tanjong Malim, Perak that is adjacent to the Automotive Hi-Tech Valley.
