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· Profits surged massively (Beat expectations): Despite revenue falling, Q4 FY26 net profit jumped 173.8% year-on-year (RM40.0m vs RM14.6m) and 26.3% quarter-on-quarter (RM40.0m vs RM31.7m).
· Dividend is BACK: This is the loudest signal of confidence to the market. The board declared a first interim dividend of 1.80 sen per share. For a stock trading around RM1.10, this yields ~1.6% per quarter (annualizing to ~6.5%)—a huge positive change from no dividends before.
· Stronger Balance Sheet: Cash position is strong (RM1.19 billion). Net Assets per share increased to RM1.30. Total borrowings are negligible.
· Operational Efficiency Improving: The report explicitly credits automation and tight cost controls for the profit jump. Higher plant utilization is expected moving forward.
The Bad (The Bear Risks)
· Revenue (Top-line) is contracting: Revenue fell 15.7% year-on-year and 2.2% quarter-on-quarter. The main culprit? Average Selling Price (ASP) dropped 21.3% in MYR terms, due to the strengthening of the Malaysian Ringgit against the USD.
· NBR (Raw Material) Costs are going UP: the theory about NBR shortages/Strait of Hormuz was correct, but it is a cost headwind, not a tailwind. The report explicitly states: "Elevated crude oil prices... exert upward pressure on key input costs, including nitrile butadiene latex." This will squeeze margins in future quarters unless ASP rises to match it.
· Huge Tax Cloud Hanging: There is a RM101 million contingent liability from the IRB (tax authorities) for additional assessments for years 2017-2021. While no provision has been made, losing this judicial review would deal a massive one-off blow to future profits.
· Profit Quality: While profit jumped, it was significantly boosted by favorable foreign exchange (RM12.3m unrealized FX gain) during the quarter. Without this, operating profit would have been lower, adding volatility to the earnings line.
The Bottom Line
The report is a "Quality Profit" surprise. Hartalega proved they can grow profits even while their ASP is dropping and raw material costs are rising. This proves strong operational resilience.
April 22, 2026
THIS REPORT HAS BEEN PREPARED BY MAYBANK INVESTMENT BANK BERHAD
Perdana Petroleum
Ready for the next offshore upcycle
Initiate coverage with BUY @ TP: MYR0.23
We initiate coverage on Perdana Petroleum with a BUY call and TP of
MYR0.23, pegged to a mid-upcycle FY27E PER of 11x, which would still be a discount to its peak of 13.3x. Our 3-year (FY25-28E) net profit CAGR of
36% is underpinned by i) a modest DCR growth of 3% annually; ii) a higher utilisation rate assumption of 63%-65% in FY27-28E; and iii) positive operating leverage in view of expectations of a multi-year upcycle in domestic capex spending from PETRONAS in 2027-2028E. Its fleet
expansion exercise and the resumption of dividend payouts are further positive re-rating catalysts. Key risks include: i) PETRONAS capex spending risks; ii) suspension or loss of PETRONAS license; iii) unexpected downtime risk; and iv) contract termination.
To ride on the upcycle in capex spending
Following a major oil price upcycle, our observation suggests that
PETRONAS tends to initiate a corresponding capex upcycle, usually with a lag of approximately one year. Moreover, the energy security theme could also see PETRONAS stepping up investments to sustain production levels and enhance resource replenishment. We are of the view that there will be a multi-year PETRONAS capex upcycle beginning 2027E. As such, the demand for OSVs should also see growth and this could propel Perdana into an earnings-growth mode amidst higher vessel utilisation.
Strong 3-year FY25-28E CNP CAGR of 36%
We forecast Perdana Petroleum’s earnings to grow at a FY25-28E 3-year core net profit (CNP) CAGR of 36%, led by a revenue CAGR of 8% and enhanced by an expansion in the group’s CNP margins to 15.7% in FY28E (from 7.9% in FY25). We expect revenue growth to be driven by: i) a modest DCR growth of 3% annually; ii) a higher utilisation rate assumption of 63% in FY27E and 65% in FY28E (from 52% in FY25); and iii) higher third- party charters due to higher vessel demand from PETRONAS and related
Petroleum Arrangement Contractors (PACs).
Now at ex-cash 4x FY27E PER
With its fleet of 14 vessels (averaging 15 years in age), Perdana Petroleum
is a clear pure-play OSV proxy to the multi-year capex spending upcycle
(which could happen in 2027-2028E). During the previous upcycle in 2023- 2024, Perdana underwent a major PER re-rating, with multiples peaking at 13.3x. As such, with expectations of a PETRONAS spending upcycle in
2027E, we deem our target PER of 11x (which is at mid-upcycle PER, but
still at a discount from peak) to be justified. Also, with a net cash of
MYR160m as at end-Dec 2025 (about 43% of current market cap), Perdana Petroleum is currently trading at about 7.5x PER on FY27E EPS (~4x ex-cash PER on FY27E EPS
No, it does not mean Hartalega has no future. It means the near-term future is very difficult, and the current high valuation is a bet on a recovery that may take years, not months.
Here is the critical distinction that separates "No Future" from "A Long, Painful Winter":
1. The "No Future" Scenario (Unlikely for Hartalega)
A company with "no future" usually has debt it cannot pay. Hartalega has Zero Borrowings (Net Cash Position) . A company with no future has obsolete technology. Hartalega is actually the industry leader in automation and efficiency.
Because of their cash pile and low cost structure, Hartalega is one of the few players guaranteed to survive a price war. Weaker Chinese or Malaysian players will run out of money and close factories first. Hartalega has the balance sheet to wait them out.
2. The Reality: A "Value Trap" Future
This is the more accurate description of where Hartalega sits today. The future likely looks like this for the next 12-24 months:
· Earnings: Will remain depressed and volatile due to Chinese dumping.
· Share Price: Will likely drift sideways or slightly down (towards the RM1.50-RM2.00 range) until there is a clear catalyst.
· Dividends: Minimal.
3. The Long-Term Future (The Bull Case for 2028+)
The "Future" for Hartalega exists, but it is dependent on an event that has not happened yet: Industry Consolidation.
Think of it like the airline industry after 9/11. Many airlines went bankrupt, but the ones with the best balance sheets (like Southwest or Ryanair) eventually came out stronger and made record profits years later.
· The Trigger: If Chinese manufacturers continue selling below cost for another 12-18 months, several will shut down.
· The Outcome: Once that excess capacity is removed, Hartalega's high-tech lines and strong cash position will allow them to re-price contracts significantly higher.
· The Timeline: This is a 2027-2028 story, not a 2026 story.
Summary Verdict
"No future" is too harsh. The company isn't going bankrupt.
"No quick profits" is accurate. If you buy at a PE of 50 today, you are buying a ticket for a recovery that is not scheduled to depart until late 2027 at the earliest. The market is pricing in a perfect recovery now, but the industry data (Chinese oversupply) says that recovery is still a long way off.
My opinion: There is a future, but the current share price is too early for that future. The "uncertainty" you mentioned is about timing, not survival.
Japan to release 50 million medical gloves to ease supply crunch
TOKYO: Japanese Prime Minister Sanae Takaichi said Thursday (Apr 16) that Japan will give out 50 million medical gloves to facilities facing shortages as the country grapples with the fallout of the war in the Middle East.
The emergency supply will come from Japan's stockpile of some 500 million medical gloves, according to local media.
"Starting in May, the government will release 50 million medical gloves from our pandemic stockpile to medical institutions facing shortages," Takaichi said in a special meeting on the situation in the Middle East.
The announcement comes as Japan, like the rest of the world, has faced severe shortages of oil-related products such as naphtha since the US-Israel war began on Feb 28. Naphtha can be used to make plastics, chemical fibers, rubber and paints.
Iran's effective closure of the Strait of Hormuz, through which a fifth of the world's crude oil and liquefied natural gas supplies transited before the war, has sent Tokyo officials scrambling to find ways to minimise the damage to the national economy.
Resource-poor Japan relies heavily on oil from the Middle East, and Tokyo has tapped into its oil reserves to ease the stress on its economy.
In recent weeks, Japanese physicians have reported a lack of supplies, including gloves and have expressed fears that the energy crisis may soon affect the quality of patient care.
Takaichi on Wednesday pledged US$10 billion in financial support for Southeast Asian economies as the crisis threatens Tokyo's procurement of vital medical equipment derived from oil.
Under the initiative, Japan will financially help Southeast Asian nations to strengthen their energy supply chain and procure crude and petroleum products.
Takaichi noted Japan relies on various supplies from Asia, including medical gloves used during surgeries.
