EXSIMHB: New Contract Win Bolsters Order Book, ‘Buy’ Rating Reaffirmed

A subsidiary has secured a significant RM50.5 million contract for the turnkey development of a water park, a move expected to substantially bolster its unbilled order book and reinforce its financial outlook.

The contract, awarded by Aqua Empire Sdn Bhd, encompasses the complete scope of work including design, supply, fabrication, construction, completion, testing, commissioning, maintenance, and guarantee. The project is slated to commence on March 2, 2026, with a targeted completion date of March 1, 2027, representing a 12-month construction period. This latest win elevates the total new job acquisitions for FY26 year-to-date to RM108.4 million, pushing the total unbilled order book to approximately RM182.2 million. This robust order book provides a healthy 1.3 times cover over the FY25 interior fit-out segment revenue.

Performance Outlook

Analysts estimate that this water park contract alone is poised to generate an estimated RM7.6 million in pre-tax profit (PBT) over its construction duration, based on a historical PBT margin of 15%. Despite this new addition, current earnings forecasts remain unchanged as the job win falls within existing assumptions.

The current order book replenishment rate stands at 43.4% of the FY26 new job win assumption of RM250.0 million. Management remains confident in achieving the remaining targets, underpinned by healthy internal job flow from the EXSIM Group’s extensive development pipeline, which boasts a cumulative Gross Development Value (GDV) exceeding RM30 billion. Furthermore, the company is actively participating in larger-scale external tenders, including potential interior fit-out works for Maybank at Merdeka 118.

Investment Recommendation

In light of these developments, TA Securities has maintained its “BUY” recommendation for the stock, with an unchanged SOP-derived target price of RM0.40. The valuation segments include the design and fit-out segment at 15 times P/E, the hospitality division at 18 times P/E, the Corus Hotel at book value, and the Tower E Hotel at a 10% discount to market value.

The investment bank continues to favor the company due to several strategic advantages. These include its position as a primary beneficiary of the EXSIM Group’s expansive development portfolio, its hybrid hospitality strategy that ensures consistent earnings visibility, and the potential for future value unlocking through a hospitality REIT.

Key Risks

Potential downside risks identified by analysts include a slower-than-expected pace of new job replenishment and a weakening outlook for the tourism sector.