Construction and property developer Lim Seong Hai Capital Bhd (LSH Capital) reported a softer set of earnings for the second quarter ended March 31, 2026, mainly due to higher tax expenses and lower contributions from its flagship residential development, LSH Segar, which is nearing completion.
The group recorded a net profit of RM18.6 million in 2QFY2026, representing a 13.8% decline from RM21.58 million a year earlier. Revenue also slipped 6.7% year-on-year to RM99.45 million from RM106.6 million.
A key factor behind the weaker earnings was a significant increase in tax expenses, which rose to RM10.64 million from RM5.45 million previously. According to the company, this was largely due to the way profits were recognised across its group structure. More construction activities were carried out by subsidiaries, resulting in higher taxable profits at subsidiary level, even though some of these profits were eliminated during group consolidation.
Another contributing factor was lower revenue recognition from the property development division. The group's flagship project, LSH Segar, has reached approximately 99% construction completion, limiting further revenue contribution as the project approaches full completion.
Despite these challenges, LSH Capital's construction and facilities management divisions delivered stronger performances during the quarter, helping to cushion the decline from the property segment.
Expanding Development Pipeline Supports Future Growth
One of the key takeaways from the results is that LSH Capital continues to strengthen its future earnings base through new project acquisitions and development opportunities.
Among the notable additions are:
LSH Bund in Jalan Pahang, with an estimated gross development value (GDV) of RM500 million.
A mixed-use development in Mukim Setapak, Selangor, carrying a GDV of RM403.9 million.
Jalan FR03 upgrading works in Kuantan undertaken in partnership with Knusford Construction Sdn Bhd.
A recently secured RM197.9 million land offer from Perbadanan Aset Keretapi for land located in the Petaling district of Selangor.
Management believes these projects will enhance earnings visibility and support the group's medium- and long-term expansion plans.
Strong Order Book Provides Long-Term Visibility
LSH Capital remains supported by a healthy construction order book and development pipeline.
As at March 31, 2026:
Outstanding construction and engineering order book stood at RM1.24 billion.
Revenue visibility from construction activities extends through FY2029.
Property development pipeline carries an estimated GDV of RM1.68 billion.
Development earnings visibility is expected to continue until 2029.
Chairman Lim Keng Cheng said the group is well-positioned for sustainable growth, backed by its sizeable order book, expanding project pipeline and growing recurring income streams.
Dividend Maintained
LSH Capital declared an interim dividend of 0.75 sen per share, slightly lower than the 0.78 sen declared a year earlier. However, cumulative dividends declared for the financial year to date increased to 1.78 sen per share compared with 1.45 sen previously, reflecting the group's continued commitment to shareholder returns.
Outlook
While earnings were impacted by the near completion of LSH Segar and higher tax charges, the company's fundamentals remain supported by a strong construction order book, a growing property pipeline and new strategic land acquisitions. Moving forward, LSH Capital plans to continue bidding for infrastructure, building and concession projects while selectively expanding its landbank across the Klang Valley and other high-growth regions.
The market appears optimistic about these prospects, with LSH Capital's share price gaining approximately 120% over the past year, giving the company a market capitalisation of about RM1.5 billion as of May 23, 2026.
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