[MARC] MARC Ratings assigns preliminary rating of AIS to Winstar’s proposed IMTN Programme

MARC Ratings has assigned a preliminary rating of AIS/Stable to Winstar Capital Berhad’s (Winstar) proposed Islamic Medium-Term Notes (IMTN) Programme of up to RM300.0 million.

The rating reflects Winstar’s established track record of over two decades in aluminium extrusion, supported by ongoing product diversification, and a broad customer base that supports revenue growth. These strengths are moderated by the cyclical nature of the industry and the group’s exposure to aluminium price volatility, which could pressure leverage.

Winstar commenced operations in 2002 with a single extrusion line in Klang and currently operates four extrusion lines with varying tonnage and technical capabilities, enabling it to meet diverse customer specifications. As at end-2025, installed capacity stood at 6,705MT per year, with utilisation rising to 89% (2022: 56%), reflecting stronger demand and improved operating scale. The group is expanding its capacity via a new facility adjacent to its existing plant in Ijok, Selangor. Upon completion of the expansion, Winstar’s installed capacity would increase to 15,285MT per year.

Winstar’s customer base comprises mainly mid-scale construction and property development players, as well as hardware stores, with demand centred on extruded aluminium profiles and related building materials. In 2025, revenue from the top five customers totalled RM32.6 million, or 13.85% of total revenue (2023: RM30.0 million; 19%), indicating limited customer concentration risk. The group’s clientele consists largely of small and medium enterprises (SMEs), supporting pricing flexibility as these customers typically place smaller orders and have fewer alternative suppliers. However, the group’s focus on SMEs exposes it to higher vulnerability during economic downturns, given the generally weaker credit profiles of such customers.

Winstar has maintained a longstanding relationship of more than 20 years with its key supplier, which accounted for about 34% of total purchases in 2025. That said, supplier concentration has moderated, with the top five suppliers accounting for about 56% of purchases (2024: 81%). Ongoing efforts to diversify sourcing, including importing raw materials from Indonesia, are expected to enhance supply stability and mitigate operational disruption risk.

Group revenue is derived from three segments: aluminium extrusion, downstream and aluminium-related products, and solar photovoltaic installations. In 2025, aluminium extrusion remained the largest contributor at 53.9% of total revenue, while the downstream and aluminium-related products segment increased its contribution to 44.3% (2024: 38.8%), supporting a more diversified earnings profile. Revenue has exhibited sustained growth over the past five years, rising to RM235.4 million in 2025 from RM89.8 million in 2021. Pre-tax profit improved to RM14.1 million in 2025 (2024: RM9.6 million), with the prior year affected by one-off IPO-related expenses. In 1H2026, pre-tax profit was stable at RM8.7 million (1H2025: RM8.3 million).

Total borrowings increased to RM160.6 million in 1H2026, driven by higher working capital requirements in line with business growth. Liquidity remains supported by RM67.3 million of unutilised credit facilities and RM16.8 million in cash and bank balances as at end-1H2026. The initial drawdown under the proposed RM300.0 million programme will be used to refinance existing borrowings and is expected to improve liquidity through the release of previously pledged cash and fixed deposits.

Farhan Darham, +603-2717 2945/ farhan@marc.com.my
Yazmin Abdul Aziz, +603-2717 2948/ yazmin@marc.com.my