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Kenanga Q2 FY2026: A Deep Dive into the Profit Paradox 📉📊
Why has Kenanga’s share price fallen from RM1.25 in 2024 to RM0.67 today? Is the market missing a massive asset play, or is it correctly pricing in a structural shift in profitability?
In our latest analysis of KIBB’s 1H FY2026 performance, we uncover the "Perfect Storm" hitting the bank:
✅ The Positives:
• AUA Expansion: Assets Under Administration grew 16.2% YoY to RM27.9 billion.
• Stockbroking Turnaround: The division flipped from a loss to a RM0.5 million PBT, capturing more institutional market share.
• Deep Discount: At RM0.67, the stock trades at just 0.46x P/B against a Net Asset Value of RM1.45.
❌ The Challenges:
• Profit Squeeze: While revenue rose slightly to RM417.5 million in 1H26, Profit After Tax plummeted 65.7% to RM4.1 million.
• The Cost Floor: Heavy investments in cybersecurity, regulatory compliance, and a one-off trading system upgrade have significantly raised the Bank's operating expense base.
• IB Slump: Investment Banking PBT fell 81.2% due to softer trading and investment income.
The Big Question: At RM0.67, has the market already priced in the weakness?
With a 7.46% dividend yield (based on the last 5.00 sen payout), the valuation floor looks strong, but the annualised ROE of under 1% suggests the market is waiting for proof that Kenanga's digital investments can translate into bottom-line growth.
