Maybank IB Raises Malaysia Earnings Forecasts, 2H 2026

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Maybank IB upgrades Malaysia technology sector for 2H 2026, citing AI and data-centre demand as primary growth catalysts.
Pentamaster receives the firm's street-high target price of RM6.00, implying 22% upside, on expectations of a step-change in earnings from advanced packaging.
PETRONAS Chemicals is cut to Sell with its target price slashed to RM3.92 from RM5.62 as geopolitical risk premiums unwind.

Maybank Investment Bank significantly boosts earnings forecasts across key Malaysia sectors for the second half of 2026, naming technology and plantation plays as top picks while downgrading war-premium stocks.

Lead

Maybank Investment Bank has sharply revised earnings forecasts upward for a clutch of Malaysia stocks, issuing a second-half 2026 strategy that tilts decisively toward technology and selective plantation names while rotating out of securities that had benefited from elevated war-risk premiums. The research house projects the FBM KLCI to reach 1,800 by year-end, with a bull-case scenario of 2,000, underpinned by Malaysia's gross domestic product growth that multiple investment banks, including Maybank IB itself, expect to exceed the government's 4.0%–4.5% official target for 2026.

What Happened

Maybank IB published its 2H 2026 Malaysia strategy in late June, formally upgrading the technology sector and identifying short-term opportunities in select plantation counters. The revision follows a first-quarter corporate reporting season in which aggregate earnings broadly held up despite macro headwinds, giving the research house confidence to make aggressive forecast changes — including more than 100% earnings upgrades on specific names across its coverage universe when measured over the full forecast horizon.

On June 24, 2026, Maybank IB initiated coverage on Pentamaster Corporation Bhd with a Buy rating and a target price of RM6.00 — the highest among 12 research houses covering the Penang-based automated test equipment and factory automation group. The call rests on the company's nine-product advanced IC and packaging portfolio, the Samurai Series, spanning silicon photonics and co-packaged optics (CPO). Maybank IB forecasts a 13% increase in Pentamaster's net profit for 2026 to RM81 million after two consecutive years of 15%–16% contraction, and projects a compounded average annual earnings growth of 24% over the following three years as the Samurai Series enters mass production in 2027 at selling prices and margins the firm describes as "well above legacy tools."

Maybank Picks for Malaysia Stocks

For Malaysia stocks broadly, Maybank IB's priority trades for 2H 2026 are clustered around two themes: AI-linked technology and dividend-rich defensive plays.

Technology is the headline upgrade. Alongside Pentamaster, ViTrox Corp Bhd is cited as the other top pick within the sector as artificial intelligence, hyperscale data-centre build-outs, and power-semiconductor demand converge to sustain order flows. Pentamaster's first-quarter 2026 revenue rose 37.1% year-on-year to RM180.4 million, validating the early-cycle demand recovery Maybank IB had flagged.

In the plantation sector, the research house does not issue a blanket upgrade but flags near-term support for crude palm oil prices, bolstered by potential El Niño disruption. Ta Ann Holdings Bhd, Genting Plantations Bhd, and TH Plantations Bhd are highlighted for their dividend yields in excess of 5%.

Within energy, Velesto Energy Bhd is identified as offering one of the highest prospective dividend yields in the market, with Maybank IB projecting 2026 and 2027 yields above 7%.

In financials, Maybank IB has upgraded Bursa Malaysia Bhd to Buy from Hold, setting a target price of RM9.50, as rising trading volumes and new-listing activity bolster the exchange operator's earnings visibility.

For the REIT sector, Maybank IB maintains a positive stance, forecasting 9% earnings growth year-on-year for 2026, with Pavilion REIT and CapitaLand Malaysia Trust as preferred vehicles on the back of healthy occupancies and positive rental reversions.

Strategic Context

The reassessment reflects a broader shift in global capital flows. Geopolitical tensions that had inflated risk premiums across certain commodity-linked equities are now easing, eroding the windfall previously available to investors in conflict-adjacent sectors. Maybank IB downgraded PETRONAS Chemicals Group Bhd to Sell from Hold and cut its target price to RM3.92 from RM5.62, citing unsustainable near-term pricing dynamics as chemical spreads retreat.

At the market level, Malaysia's economic momentum has outperformed consensus expectations in early 2026 — a development Bloomberg first reported in February as prompting multiple forecast upgrades across regional research houses. Corporate Malaysia wrapped 2025 on firm footing, and the first-quarter 2026 earnings season broadly confirmed that banking sector net profit is on track for aggregate growth of 4.9% for the full year, up from an earlier Maybank IB projection of 5.0%.

The tech-sector upgrade is especially significant given its timing. It arrives as Malaysia positions itself as a regional anchor for AI infrastructure investment, with data-centre capex flowing into Johor and Kuala Lumpur from hyperscale operators. Pentamaster and ViTrox, both seated in Penang's manufacturing corridor, are direct beneficiaries of this supply-chain build-out.

Earnings Forecast 2026: Scale of Revisions

The earnings forecast 2026 revisions for select technology names are the most dramatic in Maybank IB's current cycle. For Pentamaster specifically, the combination of a recovering base business and the pending Samurai Series ramp-up implies that net profit over the 2026–2028 window could more than double from fiscal 2025 levels, a scale of revision that places the counter in a category of its own within the firm's Malaysia coverage.

Broader Malaysia stock picks from the strategy round out the dividend and defensive end of the market. RHB Bank, Carlsberg Brewery Malaysia, Heineken Malaysia, and a range of automotive stocks all feature in Maybank IB's income portfolio for the second half, each offering prospective yields above 5%.

Outlook

The second-half pivot by Maybank IB signals a clear shift in priority for Malaysia stocks: from geopolitical-risk beneficiaries and commodity cyclicals to structural growth plays tied to the global AI infrastructure cycle and resilient domestic consumption. With the FBM KLCI trading towards the research house's 1,800 base-case target and Malaysia GDP growth expected to beat official projections, the conditions underpinning the upgraded earnings forecast 2026 calls remain in place. Investors will watch Pentamaster's mass-production timeline for the Samurai Series and crude palm oil price trajectories as the two key variables that could push outcomes toward the 2,000 bull-case or back toward the 1,450 bear-case floor that Maybank IB has defined for the benchmark index.