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· Profit before tax jumped 51.5% year-on-year (RM17.7 million vs RM11.7 million).
· Net profit increased 276% (RM13.4 million vs RM3.6 million).
· Earnings Per Unit (EPU) rose to 1.22 sen (from 0.32 sen).
2. Revenue Growth Across All Highways
· Total toll collection increased by 2.5% to RM79.7 million.
· GCE led growth at +5.5% , followed by AKLEH (+4.3%), LKSA (+0.5%), and SILK (+0.7%).
3. Improved Operating Efficiency
· Operating profit rose 12% year-on-year (RM51.8 million vs RM46.2 million).
· EBITDA margin improved to 76% (from 69%).
· Lower highway maintenance costs (RM5.1 million vs RM7.5 million) and other operating expenses (RM8.7 million vs RM11.5 million).
4. Strong Cash Position
· Cash and cash equivalents increased to RM230.4 million (from RM224.6 million at end-2025).
· Net cash generated from operations rose to RM39.6 million (from RM36.5 million).
5. Positive Economic Backdrop
· Malaysia’s GDP grew 5.3% in Q1 2026, supporting traffic demand.
· Klang Valley urban highway market forecast to grow at 4.6% CAGR through 2027.
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The Bad (Risks & Concerns)
1. Net Asset Value (NAV) Declined
· NAV per unit fell to 52.53 sen (from 55.56 sen in Q1 2025).
· Total Unitholder’s Fund decreased from RM601.4 million to RM577.9 million.
2. Lower Other Income & Interest Earnings
· Other income dropped 23% (RM3.52 million vs RM4.57 million).
· Profit income from placements fell to RM3.35 million (from RM4.56 million), reflecting lower yields.
3. Higher Finance Costs
· Finance costs remain high at RM34.1 million, though slightly lower than RM34.5 million in Q1 2025.
· Total borrowings remain large at RM2.35 billion, with principal repayment only beginning in 2033.
4. No Distribution Declared
· No distribution per unit (DPU) was proposed for Q1 2026 (same as Q1 2025).
· Distribution yield is currently N/A, which may disappoint income-focused investors.
5. Taxation Expense Volatility
· Tax expense fell to RM4.3 million (from RM8.1 million), but the effective tax rate is still impacted by timing differences and deferred tax adjustments.
· The reconciliation shows significant non-deductible expenses (RM4.0 million) and deferred tax asset recognition.
6. Macroeconomic Risks
· Elevated fuel prices, inflation, and global geopolitical uncertainties could dampen traffic volume growth and increase operating costs.
1. Strong Profit Growth
· Profit before tax rose 71.1% (YoY) for the quarter (RM46.6m vs RM27.2m).
· Profit for the year rose 20% (YoY) to RM126.6m.
· Basic EPS increased to 8.62 sen (from 7.20 sen).
2. Lower Impairment Losses
· Allowances for impairment loss on receivables dropped significantly:
· Q4: RM4.8m (vs RM15.0m last year)
· Full year: RM24.3m (vs RM37.5m last year)
· This indicates improved portfolio quality.
3. No Goodwill Impairment
· The previous year had a RM19.0m goodwill impairment; this year, none → a major positive swing.
4. Strong Dividend
· Total dividend declared for FY2026: 6.50 sen per share (same as last year).
· Second interim dividend of 3.50 sen declared, payable June 2026.
5. Solid Net Assets
· Net assets per share increased to RM0.59 (from RM0.57).
6. No Material Litigation or Unusual Items
· Clean audit report, no pending material litigation, no unusual items.
7. ESG / Governance
· No qualified audit report.
· New Employees’ Share Scheme (ESS) proposed for 2027, aligning staff incentives.
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The Bad (Areas of Concern & Decline)
1. Revenue Decline
· Quarterly revenue fell 14.3% (RM79.5m vs RM92.8m).
· Full year revenue fell 2.5% (RM323.2m vs RM331.7m).
· Main cause: lower early settlement and fee income, indicating reduced refinancing activity.
2. Higher Effective Tax Rate
· Effective tax rate > statutory rate due to non-deductible expenses.
· Tax expense rose to RM45.5m (from RM41.0m last year).
3. Lower Cash Position
· Cash and cash equivalents dropped to RM21.7m (from RM77.7m last year).
· Net cash used in financing activities: RM176.2m (mainly for Sukuk redemptions and dividends).
4. ESS Dilution Risk
· 31.7 million new options granted at RM0.96 exercise price.
· Diluted EPS is slightly lower (8.60 sen vs 8.62 sen basic).
5. Quarter-over-Quarter Decline
· Compared to preceding quarter (31 Dec 2025):
· Revenue down 2.1%
· PBT down 4.1%
· Net profit down 5.4%
6. High Financing Liabilities
· Total financing liabilities: RM2.04 billion (though slightly down from RM2.06bn).
· Interest/profit rates range from 4.4% to 5.1% → significant cost exposure.
1. Strong Asset Growth
· Total assets grew 8.7% YoY to RM106.8 billion.
· Gross financing grew 5.9% YoY to RM76.1 billion.
· Customer deposits and investment accounts grew 9.2% YoY to RM88.1 billion.
2. Healthy Capital Adequacy
· Total Capital Ratio stood at 18.4% (well above regulatory minimum).
· CET1 ratio at 13.6%, indicating strong capital buffers.
3. Improved Asset Quality
· Gross impaired financing ratio improved to 1.02% (from 0.97% in Dec 2025).
· Net allowance for impairment on financing decreased by 32% YoY (from RM79.8m to RM54.2m).
4. Strong Liquidity and Funding Base
· Customer deposits grew to RM65.5 billion.
· Investment accounts grew significantly to RM22.6 billion.
· Liquidity position supported by high cash and short-term funds (RM2.84 billion).
5. Stable Net Income (YoY)
· Total net income increased slightly YoY to RM605 million (from RM587.8 million).
· Net fund-based income grew, driven by higher financing and investment income.
6. Post-Q1 Capital Raising
· Completed issuance of RM1.0 billion Subordinated Sukuk Murabahah in April 2026, strengthening capital further.
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The Bad (Challenges & Concerns)
1. Lower Profitability (YoY & QoQ)
· Profit after tax (PAZT) fell 8.9% YoY to RM115.0 million.
· QoQ profit dropped sharply by 34.3% from RM175.1 million in 4Q2025.
2. Higher Operating Expenses
· Total overheads increased 7.7% YoY (RM17.9 million higher).
· Personnel expenses rose 8.0% YoY.
· Establishment costs (IT, depreciation, rentals) increased.
3. Lower Non-Fund Based Income
· Non-fund based income fell 18.1% YoY due to:
· Losses from revaluation of investment securities.
· Lower foreign exchange income.
· Lower fees and commission income.
4. Higher Finance Costs
· Finance costs increased 11.3% YoY (RM4.6 million higher), driven by higher costs on subordinated sukuk.
5. Decline in Net Income (QoQ)
· Net income fell 8.2% QoQ (RM59.4 million lower) due to:
· One-off property disposal gain in 4Q2025 not repeated.
· Net loss from FVTPL revaluation.
6. Lower Net Assets Per Share
· Net assets per share fell from RM3.56 (Dec 2025) to RM3.53 (March 2026), due to dividend payments and fair value losses.
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· Net Rental Income increased +15.2% YoY (RM29.0m vs RM25.2m) and +1.5% QoQ.
· Net Income Before Taxation increased +9.6% YoY (RM17.3m vs RM15.8m) and more than doubled compared to the preceding quarter (RM7.7m), mainly due to the absence of fair value losses that hit 4Q2025.
2. Strong Dividend Yield:
· Distribution per unit (DPU) for the quarter is 1.93 sen. Annualized, based on a market price of RM1.20, this yields approximately 6.4%. This is a very healthy yield for a REIT.
· The REIT is paying out 95%+ of distributable income, consistent with tax rules.
3. Underlying Demand (Healthcare Expansion):
· The revenue increase is driven by new rental income from new buildings at KPJ Ampang Puteri and KPJ Penang Specialist Hospitals. This shows that the REIT is successfully expanding its asset base within the healthcare sector.
4. Asset Sales (Positioning for Future):
· Al-Aqar is actively disposing of non-core assets (Jeta Gardens in Australia, KPJ Healthcare College in Penang). This is a strategically good move to focus on higher-quality, core Malaysian hospital assets and reduce geographical/operational complexity.
The technical outlook for Hartalega (HARTA) is solidly bullish, confirming a definitive trend reversal.
Here is the breakdown of the key signals:
1. The Golden Cross (The Most Important Signal)
The MA 50 (Green line at 1.128) is crossing above the MA 200 (Blue line at 1.098). This is a classic Golden Cross, which is one of the strongest long-term bullish signals in technical analysis. It indicates that the 50-day trend has officially overtaken the 200-day trend, signaling a structural shift from bearish to bullish.
2. Price Action & Uptrend Confirmation
The stock recently pulled back to around 1.25-1.26 (after hitting a high of 1.375) and has bounced off that level successfully. Today's move to 1.320 (+1.54%) shows buyers are stepping back in aggressively to defend the new support zone. The price is making higher highs and higher lows.
3. RSI (Momentum)
The RSI is sitting at 63.74. This is a very healthy level. It confirms strong buying pressure, but it is not yet overbought (above 70). This means there is still plenty of room for the stock to rise before a major cooling-off period is needed.
4. MACD (Momentum)
The MACD histogram has flipped back from red to a very small positive green (0.003), and the fast line is angled upward, converging with the signal line. This suggests the short-term momentum has turned back in favor of the bulls after the brief pause.
🎯 The "Now" Strategy
· Support: The level of 1.25 - 1.28 has now been successfully tested and confirmed as solid support.
· Resistance: The immediate target is to test the recent high of 1.375. If it breaks that, the next major resistance zone (based on historical supply) lies between 1.50 - 1.80.
Conclusion: The chart looks very healthy. It's not a "parabolic" bubble move, but a structured, legitimate recovery trend with solid technical foundations. The "Sell in May" seasonality seems to have been fully absorbed, and the stock is gearing up for a potential test of higher levels.
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@DrTedros determined the event constitutes a public health emergency of international concern on 17 May 2026
