Binastra, Eco-Shop, Kelington Among Top Companies For ESG Investment In 2026 -- RHB IB
KUALA LUMPUR, April 7 (Bernama) -- RHB Investment Bank Bhd (RHB IB) has selected five Malaysian companies, namely Binastra Corporation Bhd, Eco-Shop Marketing Bhd, Kelington Group Bhd, LAC Med Bhd, and MR DIY Group (M) Bhd, as its top environmental, social, and governance (ESG) investment “Diamonds in the Rough” for 2026.
In the 11th edition of its annual thematic research note, it said that the stock selections were based on five key criteria, namely return on equity (ROE) of 15 per cent or higher; 2026 net debt/shareholder funds of below 0.7 times; expanding margins in 2026, compared to that of 2025; trading at valuations below their respective industry averages; and ESG score being above their country medians.
The Malaysian companies included in this edition were comparable to their ASEAN counterparts in one key aspect, as they met all five selection criteria, it said.
“Our selection process combined both quantitative (screening) and qualitative (bottom-up analyses, mosaic theory, and industry expert insights) methodologies.
“All selected stocks fall within our coverage universe, ensuring a deep understanding of their business models, financial health, and management track records,” it said.
RHB IB projected Binastra’s ROE at a strong 43.8 per cent in the financial year of 2027 (FY2027), up from 43.7 per cent in FY2026.
“It has approximately RM7 billion unbilled orderbook, with 30 per cent to 35 per cent from Johor Bahru and 10 per cent to 15 per cent from data centre (DC) projects, supports earnings momentum as Johor jobs secured in FY2026 move into the higher end of the ‘S-curve’ from FY2027,” it said.
The bank expected Binastra to remain in a net cash position in FY2027, giving it room to pursue more projects beyond DCs.
“Meanwhile, DC jobs should also support cash flow, given their faster turnaround. We expect net margins to stay healthy, at above seven per cent from FY2027 to FY2029, versus 8.9 per cent in FY2026,” it said.
Meanwhile, RHB IB forecasted Eco-Shop Marketing’s return on average equity (ROAE) to trend above 26 per cent in FY2027-FY2028.
“Accelerating store expansion to deepen market penetration should be the primary driver to robust earnings growth (three-year compound annual growth rate: 19 per cent) and ROAE ahead.
“In addition, its profit margin should also see healthy growth, thanks to economies of scale and favourable foreign exchange (FX) rates,” it said.
The bank said Eco-Shop Marketing’s net margin should expand and stabilise at the nine per cent level in the FY2027-2028 forecast from 7.7 per cent in FY2025, as the scale of operations would increase at a faster pace to capture market opportunities.
“Investments in new distribution centres and favourable input costs on the back of a stronger ringgit and rising volumes should drive margin improvement,” it said.
As for Kelington Group, RHB IB projected the company’s ROEs to improve to 28.9 per cent and 29.7 per cent in FY2026 and FY2027, from 26.7 per cent in FY2025, underpinned by double-digit earnings growth and strong orderbook replenishment from new market access.
Meanwhile, RHB IB said LAC Med’s ROE is expected to exceed 21 per cent in 2026-2028, although this may moderate slightly as the company expands its equipment-as-a-service segment, which requires capitalising assets on the balance sheet.
“Despite this, the segment remains margin accretive, with gross profit margins potentially reaching 40 per cent.
“Net margins would remain stable at approximately 11.4 per cent to 11.5 per cent in the 2026-2028 forecast, versus 12.1 per cent in 2025,” it said.
The investment bank also projected that MR DIY Group’s ROAE would expand to 36 per cent to 39 per cent in 2026-2028, from 32 per cent in FY2025, underpinned by solid earnings delivery, supported by outlet expansion and strategies to lift same-store sales growth.
“Meanwhile, the commitment to keep its dividend payout ratio at above 100 per cent in FY2026 forecast will lead to a more efficient capital structure and higher ROAE,” it said, adding that the net margin would remain solid at 13.2 per cent to 13.5 per cent in 2026-2028 forecast versus 12.8 per cent in 2025,” it said.
-- BERNAMA
