Short Update: George Kent – 3QFY26 Results Review and Recovery in Revenue & Profitability

• George Kent (Malaysia) Berhad is a publicly listed company specialising in water metering, infrastructure engineering, and smart technology solutions.

• In 3QFY26 (ended December 2025), total revenue increased by 29% YoY to RM128.5 million (3QFY25: RM99.8 million), as shown in Table 1. Growth was driven by a 19% YoY increase in the Metering Division to RM110.0 million, supported by higher local sales. The Engineering Division rebounded to RM18.5 million, underpinned by newly secured projects.

• The adjusted operating profit margin improved from 4.1% in 2QFY26 to 6.4% in 3QFY26, signalling gradual improvement in operational performance, in line with our previous view.

• As shown in Table 2, cash and bank balances declined by 19% from RM245.7 million to RM198.7 million, mainly due to the repayment of RM66.4 million in other bank borrowings and lower drawdowns during the quarter. Despite this, the Group remained in a net cash position, with a net cash ratio of 8%.

• Adjusted EBITDA interest coverage improved from 1.0 times in 2QFY26 to 1.6 times in 3QFY26, supported by gradual revenue recovery during the quarter.

• Liquidity metrics strengthened further, with the current ratio improving from 3.6 times in FY25 to 7.3 times in 3QFY26. Inventory turnover also increased from 1.2 times to 1.9 times, reflecting continued operational improvement.

• George Kent’s collaboration with Qingdao Topscomm Communication Co Ltd on the locally branded ultrasonic smart water meter is progressing as scheduled, with trial production expected in 2H2026 (June 2026).

• Key risk consideration includes foreign currency exposure (USD, SGD, EUR, VND), which may affect procurement costs, project margins, and translation of overseas earnings, potentially impacting profitability.

• Overall, the latest quarterly results are aligned with our previous view, with operational and margin recovery.

• As discussed previously, the Group plans to refinance its maturing sukuk via a new bond issuance (3-year at 5.00% and/or 5-year at 5.25%), rated A+ by MARC with stable outlook, as shown in Table 3. Given the improving credit profile and strong liquidity, we continue to prefer the 3-year tenure option, while investors with higher risk appetite may consider the 5-year tenure.

• For further insights, refer to  George Kent’s New Sukuk Issuance: 3-Year and/or 5-Year MYR Bonds with IPG of 5.00%–5.25% | Bondsupermart

Table 1: George Kent’s Revenue Comparison

Table 2: Key Credit Metrix

Table 3: George Kent’s Bond

Declaration

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report holds a NIL position in the abovementioned securities.