E: Construction Firm Anticipates Robust Q4 Performance, Reiterates Buy Rating

A leading construction and engineering firm is set to deliver a strong performance in the fourth quarter of 2025, with earnings projected to range between MYR60 million and MYR70 million. This anticipated growth, representing a year-on-year increase of 15% to 35%, is expected to be primarily driven by accelerated progress billings from ongoing projects and significant contributions from its property development segment. The company maintains its “Buy” recommendation, reflecting confidence in its operational capabilities and future prospects.

Performance Review and Operational Highlights

The robust 4Q25 outlook is underpinned by key project milestones and effective operational management, including prudent cost efficiencies. Major construction initiatives, such as the MYR710 million Astrum Ampang project, reached a significant milestone in December 2025 with the topping out of all six residential towers. This project is estimated to have achieved 80-90% completion by the end of the quarter, signaling substantial revenue recognition. Additionally, the MYR100.2 million Viera 15 project, awarded in November 2025, has commenced initial works, while the Seri Embun project, part of a larger development, is approximately 40-50% complete as of December 2025.

While the company demonstrates strong operational momentum, it faces ongoing challenges typical of the industry, including potential property market slowdowns and persistent cost pressures. However, management’s focus on efficient execution and strategic project selection has largely mitigated these risks, contributing to the positive earnings trajectory.

Future Outlook and Strategic Initiatives

The firm’s future growth is supported by a substantial active tenderbook, currently valued at MYR1.5 billion to MYR2 billion, with over half originating from related-party transactions, ensuring a steady pipeline of work. Significant potential contract wins are expected from new launches by Eastern & Oriental (E&O), which could translate into MYR400-500 million in contract value for the firm from E&O’s projected MYR1 billion annual gross development value (GDV) launches. Furthermore, opportunities from the remaining reclamation works for Andaman Island are estimated to be between MYR300 million and MYR500 million.

In addition to its core construction activities, the company is poised to unlock the value of its extensive landbank, comprising 89 acres in Klang Valley and Penang, with an estimated GDV of at least MYR3 billion. This strategic focus on property development and asset monetization is expected to provide further catalysts for growth. The investment bank maintains a “BUY” rating with a target price of MYR3.35, inclusive of a 2% ESG premium, citing the steady flow of projects and landbank unlocking initiatives as key drivers.