PETALING JAYA: Prawn farming company Mag Holdings Bhd

, which has a dominant 20% share in the Malaysian aquaculture industry, offers investors exposure to a shrimp supercycle, analysts say.

In a note, Mercury Research said that MAG is also bolstered by solid revenue of RM344.7mil for its financial year ended June 30, (FY25).

The research house initiated coverage on MAG stock, with a “buy” call and a target price of 22 sen.

This was based on a target price-earnings (PE) multiple of 9.5 times against forecast FY27 earnings per share of 2.3 sen.

The valuation reflects a 15% discount to peers’ trailing PE average of 11.1 times.

With about 60% of sales directed to export markets, Mercury Research said MAG enjoys premium pricing from international buyers, particularly in China and South Korea where seasonal demand spikes have historically driven third and fourth-quarter revenue surges.

“Margins are poised to strengthen, with gross profit expected to expand from 24.8% in FY26 to 25.9% in FY28, supported by scale efficiencies and higher-value downstream contributions.

“MAG’s long-standing relationships with key supplier provides reliable access to raw material and feedstock at competitive prices, enabling the company to sustain margins even during periods of volatility,” the research house said.

It added that MAG’s management also has plans to expand further into Turkey and Europe to broaden revenue streams and reduce the risk of market concentration.

Global seafood demand continues to rise, with shrimp at the forefront of this trend.