Highlights
Developers generally maintained their full-year sales targets despite several launches being pushed back. Meanwhile, commercial and industrial products were a bright spot during the quarter.
We remain positive on industrial and DC demand, particularly for established developers with strong execution capabilities and strategically located landbanks.
Maintain OVERWEIGHT on the sector’s palatable valuations at 0.85x 12 month forward P/B (+0.5SD above mean). Our top picks are: a) EcoWorld, supported by strong industrial exposure; and b) Mah Sing, with its recent progress into DC and attractive valuation.
Analysis
2Q26 results wrap. The sector’s 2Q26 results were broadly within expectations, with Mah Sing, Sunway and Matrix Concepts coming in in line, while SP Setia fell below expectations on weaker residential revenue recognition. Overall, the sector’s 2Q26 core net profit grew by around 40% yoy to RM860.4m, due to: a) IOIPG’s recognition of Jalan Ampang land sales and higher occupancy at IOI Central Boulevard Tower, and b) new contribution from Sunway MCL.
Sales targets broadly intact despite few delayed launches. Developers generally maintained their full-year sales targets despite several launches being pushed back. 1H26 property sales progress was generally healthy, with Lagenda, Mah Sing, Sunway achieving 46%, 48% and 55% of their respective full-year targets in 1H26, while Matrix Concepts’ 1QFY27 sales tracked at 23% of our full-year assumption. SP Setia’s 1H26 sales were relatively softer at 31% of its 2026 target, reflecting softer residential demand outside its stronger locations. IOIPG’s core Malaysia property sales came in at RM2.1b for FY26, broadly in line with its guidance of around RM2b per annum.
Commercial products emerged as a strong support pillar. Management’s commentaries on construction costs were broadly unchanged from our earlier checks, with the impact from higher input costs remaining manageable. Residential demand, however, was more selective with location a key consideration for buyers. Commercial products emerged as another resilient pocket of demand, particularly in established townships. IOIPG’s Cube Plus commercial units, with gross development value of around RM738m and pricing from around RM8m per block, were fully taken up, while SP Setia highlighted strong demand for Setia Alam shoplots and plans to accelerate commercial launches to compensate weakness in residential sales.
Highlights
Developers generally maintained their full-year sales targets despite several launches being pushed back. Meanwhile, commercial and industrial products were a bright spot during the quarter.
We remain positive on industrial and DC demand, particularly for established developers with strong execution capabilities and strategically located landbanks.
Maintain OVERWEIGHT on the sector’s palatable valuations at 0.85x 12 month forward P/B (+0.5SD above mean). Our top picks are: a) EcoWorld, supported by strong industrial exposure; and b) Mah Sing, with its recent progress into DC and attractive valuation.
Analysis
2Q26 results wrap. The sector’s 2Q26 results were broadly within expectations, with Mah Sing, Sunway and Matrix Concepts coming in in line, while SP Setia fell below expectations on weaker residential revenue recognition. Overall, the sector’s 2Q26 core net profit grew by around 40% yoy to RM860.4m, due to: a) IOIPG’s recognition of Jalan Ampang land sales and higher occupancy at IOI Central Boulevard Tower, and b) new contribution from Sunway MCL.
Sales targets broadly intact despite few delayed launches. Developers generally maintained their full-year sales targets despite several launches being pushed back. 1H26 property sales progress was generally healthy, with Lagenda, Mah Sing, Sunway achieving 46%, 48% and 55% of their respective full-year targets in 1H26, while Matrix Concepts’ 1QFY27 sales tracked at 23% of our full-year assumption. SP Setia’s 1H26 sales were relatively softer at 31% of its 2026 target, reflecting softer residential demand outside its stronger locations. IOIPG’s core Malaysia property sales came in at RM2.1b for FY26, broadly in line with its guidance of around RM2b per annum.
Commercial products emerged as a strong support pillar. Management’s commentaries on construction costs were broadly unchanged from our earlier checks, with the impact from higher input costs remaining manageable. Residential demand, however, was more selective with location a key consideration for buyers. Commercial products emerged as another resilient pocket of demand, particularly in established townships. IOIPG’s Cube Plus commercial units, with gross development value of around RM738m and pricing from around RM8m per block, were fully taken up, while SP Setia highlighted strong demand for Setia Alam shoplots and plans to accelerate commercial launches to compensate weakness in residential sales.
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