KUALA LUMPUR: Panasonic Manufacturing Malaysia Bhd (PMMA) may face a challenging fiscal year 2026 (FY26) as slowing global trade, rising competition and internal capacity issues weigh on growth prospects, said Hong Leong Investment Bank (HLIB).
“Management remains cautious heading into FY26, citing a volatile and uncertain macro environment, driven by shifting market dynamics and intensifying competitive pressures. With the conclusion of recent tariff negotiations, risks arising from global policy uncertainty have eased.
“Nevertheless, global trade momentum may remain subdued, weighed down by the potential impact of higher tariffs or further geopolitical tensions, which could dampen global economic growth,” HLIB said in a recent note.
Internally, PMMA is also struggling with underutilised plants after exiting the kitchen appliances segment. The exit reflects a broader shift within the Panasonic group to optimise operations and reallocate resources toward more promising product lines like vacuum cleaners, fans, and emerging water-related solutions.
HLIB noted that while new water-related products are expected to gradually fill idle capacity, meaningful scale may take three to five years to materialise, with no clear first-mover advantage in the market.
“We believe this venture may not be able to fill the vacuum from the discontinued kitchen appliances business, given the group’s lack of a first-mover advantage in the water-related products market. To mitigate this, the group is intensifying efforts to enhance operational efficiency and build resilience to strengthen its long-term performance,” HLIB said.
HLIB has revised earnings sharply lower, cutting FY26 and FY27 forecasts by 36 per cent and 35 per cent, respectively. The target price has also been reduced to RM6.88 from RM10.77, based on an unchanged 10x FY26 price-earnings multiple.
The investment bank kept its Sell call on PMMA, pointing to the lack of near-term catalysts and persistent structural challenges.
“The stock’s outlook remains negative in the short to medium term,” it said.
Separately, stock exchange filings reveal that Kumpulan Wang Persaraan (Diperbadankan) (KWAP), Malaysia’s statutory pension fund, has been steadily cutting its stake in PMMA, reducing its holding to 5.374 per cent as of Sept 2, 2025. The Employees Provident Fund (EPF) remains a significant shareholder with a 10.71 per cent stake. Panasonic Corp. holds 47.5 per cent.
Financially, PMMA delivered a soft start to the year. First-quarter ended June 30, 2025 (Q1 FY26) revenue was RM179.7 million, flat quarter-on-quarter (QoQ) but down 19 per cent year-on-year (YoY), while core net profit came in at RM9.7 million – up 5 per cent sequentially but nearly halved from a year earlier. The results, making up just 15 per cent of full-year forecasts, missed expectations due to weaker sales.
By segment, living appliances and solutions tumbled 21 per cent QoQ and 37 per cent YoY based on weaker vacuum cleaner sales in the Middle East and softer domestic demand. Heating and ventilation grew 4 per cent QoQ on stronger shower exports to Vietnam, Brunei and the Philippines, but still fell 15 per cent YoY amid heavy Chinese competition and instability in key markets such as Iraq.
In a filing with the stock exchange, PMMA said the conclusion of recent tariff talks has eased risks linked to global policy uncertainty. However, global trade momentum is expected to stay weak, as higher tariffs or escalating geopolitical tensions could further weigh on economic growth.
Amid shifting market dynamics and rising competition, the company expects a volatile operating landscape in FY26A.
“While profitability may remain under pressure, the company is committed to driving sales growth, enhancing operational efficiency, and building resilience to strengthen its long-term performance,” it said.
© New Straits Times Press (M) Bhd
