JTGROUP: Utilities Engineering Provider Delivers Strong FY25 Results, Target Price Raised
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading utilities engineering services provider has reported robust financial performance for its fiscal year 2025 (FY25), with its core net profit aligning well with expectations. The company achieved 96% of full-year forecasts and consensus estimates, with earnings rising significantly year-on-year.
Performance Review
The company’s core net profit for FY25 stood at RM10.9 million, marking a substantial increase of four times compared to FY24. This strong growth in FY25 followed a challenging FY24, which was impacted by delays in KLCC-centric projects due to council access approvals and traffic constraints. The fourth quarter of FY25 also saw continued strengthening in performance, with revenue surging by 60.2% quarter-on-quarter and core net profit rising by 9.9%.
This improvement was primarily driven by two major high-voltage projects: the 275kV bulk supply connections to a Johor data centre and a Selangor data centre, which together contributed to 36% of the quarter’s revenue. While the net margin in 4Q25 was softer, mainly attributed to higher cable sales during the period, the overall core profit trajectory remained positive.
Future Outlook and Investment Thesis
The company maintains a strong growth trajectory, underpinned by a solid execution track record in power-infrastructure works. It is strategically positioned to benefit from the structural tailwinds of Malaysia’s grid upgrade cycle, including TNB’s estimated RM35 billion grid capital expenditure (capex), and the accelerating data-centre build-outs across the region. These data-centre-related works are expected to remain a key earnings catalyst.
Visibility on future earnings is robust, supported by a significant RM733 million order book, representing 3.8 times revenue cover, and an extensive RM4.5 billion tender book. This strong pipeline suggests a multi-year earnings runway, with project momentum remaining solid. Coupled with an expanding order book and anticipated improvements in margins, the company is well-prepared to deliver sustained earnings growth.
Analysts from TA SECURITIES have reiterated their BUY recommendation, raising the target price to RM0.25, representing a potential upside of 25.0% from the last traded price of RM0.20. The valuation is anchored on a 16x FY27F price-to-earnings (P/E) multiple, reflecting the company’s superior forward earnings growth and strong market positioning within the small-cap construction sector.
