This Bursa Malaysia brokers’ digest covers four research calls on Malaysian REITs, CIMB Group Holdings Bhd (KL:CIMB), Gamuda Bhd (KL:GAMUDA) and Mr DIY Group (M) Bhd (KL:MRDIY). Each stock below stands alone, so read the sections that match your watchlist.
Bursa Malaysia Brokers’ Digest: Why Does RHB Still Like M-REITs?
RHB Investment Bank says the M-REIT sector’s de-rating is largely valuation-driven, with occupancy, reversions and earnings visibility intact. The Bursa Malaysia REIT Index-MGS10 yield spread sits around 230bps, close to +1SD from the long-term mean.
For the M-REITs it covers, 1H26 revenue grew c.15% and earnings grew c.17% y-o-y. Much of that uplift came from IGB REIT (KL:IGBREIT) after the Mid Valley Southkey acquisition.
Which M-REITs Are RHB’s Top Picks?
RHB names Axis REIT (KL:AXREIT) and Pavilion REIT (KL:PAVREIT) as top picks. Axis REIT has at least around RM250 million of additional acquisition and development opportunities under consideration.
How Could Utility Costs and Rates Hit REIT Margins?
RHB expects 3Q26 retail REITs to improve q-o-q after a seasonally softer 2Q. Higher utility costs from the automatic fuel adjustment (AFA) shift could compress net property income margins by about 50-100bps for retail and office-heavy REITs.
RHB Economics expects a 25bps OPR hike in 1H27. On a full-year 25bps rise in borrowing costs, RHB’s sensitivity analysis shows sector FY27F earnings falling by up to 2%.
Why Is CIMB Buying Back RM446 Million of Its Own Shares?
AmInvestment Bank says the market has been “too quick to turn bearish” on CIMB over Indonesia and the recent bond yield spike. CIMB kept its 11%-11.5% ROE guidance and bought back RM446 million of shares at an average RM7.60 between Sept 21 and Oct 16.
That buyback price sits about 6% above current levels, which AmInvestment reads as management confidence. It also cites the 6%-7% dividend yield as a further point in CIMB’s favour. For how yields are calculated, see our Dividend Investing Guide.
Could CIMB Privatise PT Bank CIMB Niaga Tbk?
With PT Bank CIMB Niaga Tbk’s valuation beaten down, CIMB is weighing privatisation. Buying the balance 7.5% stake would cost RM600 million to RM700 million, which AmInvestment says is well within reach.
CIMB has some RM850 million in excess capital from its Thai auto loan disposal (previously RM1.3 billion). Its 3Q26 trading income stayed resilient sequentially.
How Is CIMB Managing Higher Funding Costs?
CIMB is shifting from wholesale to cheaper retail deposits in Malaysia. It is also repricing loans and optimising deposit mix in Indonesia ahead of further rate hikes.
Tapping liquidity from Singapore and Hong Kong to fund Malaysian operations gives a 20-30bps cost advantage.
What Does Gamuda’s Record RM63.9 Billion Order Book Mean?
MBSB Research names Gamuda (KL:GAMUDA) its top construction pick. The record pro forma order book stands at RM63.9 billion.
Management expects FY27 construction revenue and PBT to grow around 60% y-o-y, with 90% of revenue already covered by existing contracts. Property sales are targeted to more than double to RM7.0 billion in FY27, backed by a RM9.4 billion launch pipeline across Vietnam, Singapore and Malaysia over FY27-FY28.
What Is the Northern Perak Water Supply Scheme Worth to Gamuda?
Gamuda’s 50:50 joint venture with Perbadanan Kemajuan Negeri Perak (PKNPk), Khazanah Air Perak (KAP), signed an agreement to implement the Northern Perak Water Supply Scheme (NPWSS). KAP handles raw water works, while its wholly-owned subsidiary Prasarana Air dan Irigasi Perak (PAIPP) develops and operates the water treatment plants.
The scheme follows a 40-year bulk water supply agreement with Penang signed in July 2026. Penang committed to a minimum offtake of 300 million litres per day, with supply targeted to start on March 31, 2032.
Based on a RM210 million annual capacity charge and a RM1.70/m3 supply tariff, MBSB Research estimates annual project revenue of around RM396 million. Gamuda’s 50% share is RM198 million, which at a 15%-20% PAT margin could translate into RM30 million to RM40 million in attributable earnings once operations stabilise.
Why Did Mr DIY Shares Fall 20.0% Year-to-Date?
CGS International says Mr D.I.Y. Group (M) Bhd (KL:MRDIY) is down 27.3% over 12 months and 20.0% year-to-date. The FBM KLCI fell 1.1% over 12 months and 4.2% year-to-date.
Two causes stand out: lower foreign shareholding after its reclassification to the MSCI Malaysia Small Cap Index in May 2026, and concern over Pinduoduo’s (PDD) free shipping on single item purchases.
How Big Is Pinduoduo’s Threat to Mr DIY?
CGS estimates PDD’s Malaysia e-commerce market share at RM1 billion-RM3 billion a year, or 1.4%-3.4%. That is less than 0.4% of Malaysia’s total retail sales.
CGS views the free shipping as a short-term marketing subsidy from PDD Holdings. It does not expect the offer to persist after the E-Commerce Bill is implemented, based on Thailand’s precedent.
Is the Slower Store Rollout a Problem?
Mr DIY originally targeted 155 new store openings a year. It opened only 62 net new stores in 1H26, making the full-year target a challenge.
CGS sees the slowdown positively, as management can focus on existing stores. Negative same-store sales growth (SSSG) has been a key investor concern.
Key Takeaways
- RHB Investment Bank names Axis REIT and Pavilion REIT as top picks, with sector 1H26 earnings up c.17% y-o-y.
- AmInvestment Bank: CIMB bought back RM446 million at an average RM7.60 between Sept 21 and Oct 16.
- MBSB Research sees Gamuda’s RM63.9 billion order book and estimates RM30 million to RM40 million in attributable NPWSS earnings.
- CGS International: Mr DIY is down 20.0% year-to-date, with 62 net new stores in 1H26 against a 155-store target.
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Disclaimer: This article is for general information only and is not investment advice. Figures come from the broker research cited above and may change. Always do your own research before making any investment decision.
Frequently Asked Questions
What is the current M-REIT yield spread on Bursa Malaysia?
RHB Investment Bank puts the Bursa Malaysia REIT Index-MGS10 yield spread at around 230bps, close to +1SD from the long-term mean. The figure was published on Oct 20.
Why has Mr DIY’s share price fallen this year?
CGS International says Mr DIY is down 20.0% year-to-date. It links the fall to lower foreign shareholding after the MSCI Malaysia Small Cap Index reclassification in May 2026, and to Pinduoduo’s free shipping campaign.
How much did CIMB spend on its share buyback?
CIMB bought back RM446 million of shares at an average RM7.60 between Sept 21 and Oct 16, according to AmInvestment Bank. The bank’s 6%-7% dividend yield is cited as another point in its favour.
How big is Gamuda’s order book?
MBSB Research puts Gamuda’s record pro forma order book at RM63.9 billion. It says 90% of FY27 construction revenue is already covered by existing contracts.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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