HAWK: Target Price Reaffirmed on Strong Orderbook and Diversified Growth Prospects
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.41 (+47.1%) |
| Last Traded | RM0.28 |
| Recommendation |
TA Securities has maintained its “BUY” recommendation for the company, setting a target price of RM0.41 per share, indicating a substantial 47.1% upside from its last traded price of RM0.28. The positive outlook is primarily driven by an anticipated normalisation of the expanded EPCC segment, a robust orderbook and tender pipeline, and new growth opportunities emerging from data centre projects.
Strategic Shift and O&G Recovery
The company’s expanded EPCC (Engineering, Procurement, Construction, and Commissioning) segment, which contributed a significant 77% (RM94.0 million) to its total revenue in FY25, is projected to see its contribution moderate to approximately 45-55% in FY26F. This shift aligns with the management’s renewed focus on oil and gas (O&G) activities, where significant traction is expected. The company anticipates securing new O&G contracts totaling up to RM150 million within FY26F as industry activity improves. Its exposure within the O&G sector remains predominantly in the downstream segment (85-90%), leveraging its strong positioning in maintenance and plant-related services.
Robust Orderbook and Future Visibility
As of December 31, 2025, the company’s expanded EPCC orderbook stood at RM138.1 million. This robust orderbook provides excellent near-term earnings visibility, with recognition expected across FY26F-FY27F. Beyond this, the group maintains a healthy pipeline of opportunities across various segments. Within the O&G sector, the company holds a tender book of RM120.0 million spread across six projects, complemented by two call-out contracts. Additionally, its CMW orderbook totals RM30.0 million from seven shortlisted projects, and it is actively bidding for RM18.0 million worth of TNB projects in the utilities space.
New Growth Avenues in Data Centres
The company is also strategically diversifying into the burgeoning data centre market. It has successfully secured a mechanical and electrical (M&E) works contract for a data centre project in Johor, valued at approximately RM35.0 million, with completion anticipated by July 2026. Management has also indicated that the company is currently bidding for two additional data centre-related M&E contracts. While details remain undisclosed due to the early bidding stages, these potential awards could further enhance the company’s project pipeline and future growth trajectory.
Earnings Stability and Investment Recommendation
Despite these strategic shifts and growth initiatives, TA Securities has maintained its earnings forecasts. The firm reiterated its “BUY” recommendation with an unchanged target price of RM0.41 per share, based on 8.5x FY26F EPS and an incorporated 3% ESG premium, underscoring confidence in the company’s future performance and valuation.
