PETALING JAYA: Berjaya Research Sdn Bhd sees potential re-rating catalysts for educational materials publisher and education solutions provider Sasbadi Holdings Bhd, based on the group’s proactive pursuance of strategic mergers and acquisitions to tap into fresh revenue streams.
Furthermore, Sasbadi’s complementary strengths support the growing digitalisation needs of Malaysia’s education system and meaningful demand recovery in the retail segment are also within Berjaya Research’s radar.
However, the research firm noted that key downside risks include failing to secure contracts from the Ministry of Education, higher operating expenses and changes in government policies.
Touching on earnings, Berjaya Research said Sasbadi’s first-quarter FY26 (1Q FY26) revenue and profit after tax and minority Interests came in at 33.4% and 66.3% of the company’s previous FY26 forecasts, respectively.
“We deem the results in line with our expectations, given the group’s high cyclicality, as it typically records stronger performance in the 1Q-2Q period due to the start of the academic year, which drives higher demand for academic books.
“That said, we gathered that the change in school opening from February to January this year may have led to some shift in sales volume that was previously recognised in 1Q.
“As such, we expect 2Q volumes to soften slightly year-on-year (YoY). Nevertheless, we maintain our FY26 gross profit margin assumption of 35% for the Print Publishing segment, underpinned by expectations of improved cost pass-through of SST-related increases in paper input costs going forward.
“This is notwithstanding the potential risk of selective inventory impairment following the introduction of centralised evaluations for Primary Four and Form Three students, beginning in 2026 and 2027, respectively,“ Berjaya Research analyst Wong Choo Hong said in a report.
The research firm noted that Sasbadi’s 1Q FY26 revenue declined 8.1% YoY to RM31.3 million, reflecting the absence of Madani book sales recorded between May and December 2024, which in turn weighed on Print Publishing volumes.
Despite this, net profit remained largely stable, easing only 1.8% to RM5.7 million, supported by a more favourable revenue mix and a significant improvement in Print Publishing gross margins to 52.2% from 39.1% a year earlier.
On a quarter-on-quarter basis, revenue rose sharply by 58.4% to RM31.3 million, driven by seasonal demand, while net profit rebounded to RM5.7 million from a loss of RM3.9 million in the preceding quarter, supported by higher sales volumes, improved margins and the absence of year-end inventory impairments.
Berjaya Research said following a review of segmental assumptions, revenue forecasts for FY26 and FY27 have been revised upwards to RM109.7 million and RM112.1 million respectively, while net profit is now expected to reach RM8.7 million in FY26 and RM9.4 million in FY27, reflecting a higher-than-anticipated contribution from the paper-based stationery segment.
“We maintain our Neutral recommendation on Sasbadi with an unchanged target price of RM0.16, derived from a target price-earnings multiple of 8.0 times FY26 forecast earnings.
“This represents a one standard deviation premium to the two-year forward average and is considered justified by the group’s leading position in academic publishing, improving cash flow profile and strengthened balance sheet,“ Berjaya Research said.
On outlook, the research firm noted that the group has participated in the Education Ministry’s textbook tenders for the new school curriculum, which will take effect in 2027, with further tenders expected to be rolled out over the next few years as the new textbook procurement cycle commences.
The tender exercise comprises 21 titles with a total indicative contract value of RM93.7 million. The results are expected to be announced by Q3 FY26.
“Leveraging the group’s digital capabilities, content readiness and proven track record in securing government contracts, we remain confident that the group can secure a portion of these tenders, with margins estimated to trend towards the higher end of its historical range,“ Berjaya Research said.
Sasbadi has also entered into a memorandum of understanding with Intel Microelectronics (M) Sdn Bhd and Maistorage Technology Sdn Bhd to explore a potential collaboration to deliver hybrid and offline-first AI-enabled learning environments for the education sector.
The proposed collaboration includes deploying a Content Access Point platform for local caching and offline access to educational content; integrating AI platforms and technologies for real-time, on-device inference; and co-developing and localising educational solutions aligned with national blueprints in Southeast Asian countries.
“We view the development positively for an early-stage strategic initiative, as an AI-powered offline learning ecosystem could be scalable over time and enable deeper penetration into rural schools with limited network connectivity, potentially creating monetisation opportunities in the longer term.
“However, given that the collaboration is in an exploratory stage, any commercialisation is likely to require a gestation period. The MoU will remain effective from Jan 28, 2026, to June 30, 2027,“ Berjaya Research said.








