AWC: Major Rail Contract Win Strengthens Order Book, Analysts Maintain Buy Recommendation

A wholly-owned subsidiary has successfully secured a significant contract valued at RM60.0 million from Prasarana Malaysia Berhad. The agreement, awarded to Trackwork & Supplies Sdn Bhd (TWS), involves the replacement of aluminium composite power conductor rails for the LRT Ampang Line. The project encompasses the full scope of supply, installation, testing, and commissioning, with a duration of 36 months from the commencement date.

Contract Award Details and Financial Impact

This latest award significantly bolsters the company’s Rail Division, bringing total contract wins for fiscal year 2026 (FY26) to approximately RM330 million. Investment analysts from Malacca Securities view this contract win as a positive development, underscoring the group’s strong track record in rail infrastructure projects. The 36-month duration of the contract is expected to provide substantial earnings visibility for the Rail Division through FY26-FY28. Assuming a conservative net profit margin of 10%, the extension is projected to contribute around RM6.0 million to the company’s earnings over the period. The award also highlights Prasarana’s continued confidence in the company as a repeat contractor.

Analyst Outlook and Valuation

Despite the new contract, Malacca Securities has maintained its earnings forecast, noting that this job win was within their prior expectations. The firm reiterated its “Buy” recommendation for the company, with an unchanged target price (TP) of RM0.66. This target price is derived using a price-to-earnings (P/E) ratio of 10.0x pegged to a mid-FY27f fully-diluted earnings per share of 6.58 sen.