PETALING JAYA: Engtex Group Bhd
is expected to continue to see gross margin expansion going into the financial year 2026 (FY26) supported by local sourcing of hot-rolled coil, stable steel prices, reducing margin volatility, and depletion of high-cost inventory.
Engtex reported a strong core net profit (CNP) of RM16.5mil in the fourth quarter of 2025 (4Q25) recording significant growth on a year-on-year (y-o-y) basis, bringing FY25 CNP to RM27.4mil. This had beaten expectations at 241% to 242% of CGS International (CGSI) Research’s and Bloomberg consensus forecasts.
“Our forecasts are maintained pending a meeting with management. We believe the earnings beat was driven by a higher-than-expected gross profit margin and a lower-than-expected tax rate, likely due to improving earnings at the subsidiaries level,” the research house said in a report yesterday.
Engtex’s 4Q25 gross profit margin surged to 13.9% (highest since FY17 of 16.6%), mainly due to the depletion of high-cost inventory and a more stable steel price environment, which the research house reckon led to the quarter-on-quarter and y-o-y growth in the quarter’s earnings.
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