Benalec Holdings Sees Turnaround Momentum as Capital Efficiency Improves
KUALA LUMPUR – Investors in Benalec Holdings Berhad (KLSE:BENALEC), a Malaysian-based marine construction and land reclamation specialist, have reason for cautious optimism. After a period of sustained losses, the company has reported a positive Return on Capital Employed (ROCE), signaling a potential inflection point in its long-term recovery story.
ROCE, a key measure of how efficiently a company generates profits from its capital, stood at a modest 0.5% for the trailing twelve months to September 2025. This translates to a pre-tax profit of RM2.4 million from capital employed. While this figure remains well below the construction industry average of around 10%, it marks a decisive shift from the negative returns recorded five years ago.
"A positive ROCE, however small, is a critical milestone for any company emerging from a loss-making cycle," said a market analyst familiar with the sector. "For Benalec, it indicates that management's efforts to streamline operations and divest non-core assets are beginning to bear fruit."
Notably, the company achieved this improvement while its capital employed shrank by approximately 29% compared to five years ago. This suggests Benalec is generating returns more efficiently from a smaller asset base, potentially through the sale of underperforming assets and a sharper focus on its core competencies in land reclamation and marine infrastructure.
The stock, which has declined 44% over the past five years, may now present a different risk-reward profile for investors seeking exposure to Malaysia's infrastructure sector. The improving ROCE trend, coupled with a significantly reduced share price, is likely to put Benalec back on the watchlists of value-oriented funds.
Market Voices: A Mixed Bag of Reactions
We gathered perspectives from several retail investors on this development:
David Lim, Portfolio Manager: "This is a classic 'deep value' signal. The move to positive ROCE is the first step. The capital reduction shows pruning, which is good. It's not time for celebration yet, but it's certainly time for closer due diligence."
Sarah Chen, Independent Trader: "0.5%? Let's not get carried away. The industry average is 10%. This isn't a turnaround; it's a barely-there blip. Shareholders have lost nearly half their money in five years. I need to see sustained profit growth and contract wins before calling this anything other than a speculative trade."
Aisha Binti Ismail, Long-term Shareholder: "Finally, some green shoots. After years of patience, it's a relief to see the company back in the black on this metric. The management seems to be making the tough decisions they should have made earlier. I'm holding."
Mark Tan, Engineering Consultant: "The fundamentals of their business—land reclamation—are tied to long-term regional development. If they've truly right-sized the ship, even a small improvement in efficiency can leverage up significantly when the next big project cycle arrives."
Disclaimer: This analysis is based on historical data and publicly available figures. It is not financial advice. Investors should conduct their own research or consult a financial advisor.