CBH Engineering’s Q1 2025 Performance: A Post-IPO Snapshot and Future Outlook
Greetings, fellow investors and market enthusiasts! Today, we’re diving into the inaugural quarterly financial report of CBH Engineering Holding Berhad for the first quarter ended 31 March 2025. As a relatively new entrant to the ACE Market of Bursa Malaysia, having listed on 16 January 2025, this report offers our first detailed look at their performance post-Initial Public Offering (IPO). While the company demonstrates solid profitability, a closer look reveals a quarter-on-quarter dip, signaling a dynamic period of adjustment and strategic positioning. Let’s break down the numbers and see what’s shaping CBH Engineering’s journey.
Core Data Highlights: Navigating the Numbers
Q1 2025 Financial Snapshot: A Profitable Start Post-IPO
For its first quarter as a publicly listed entity, CBH Engineering reported a commendable set of figures. It’s important to note that as this is their first interim report post-IPO, comparative figures for the same quarter last year (Q1 2024) are not available. Therefore, our primary comparison will be against the immediate preceding quarter (Q4 2024) where relevant.
Revenue: RM36.44 million
Gross Profit: RM10.76 million
Profit Before Tax (PBT): RM7.52 million (PBT Margin: 20.64%)
Profit After Tax (PAT): RM5.74 million (PAT Margin: 15.75%)
Basic and Diluted Earnings Per Share: 0.31 sen
These figures demonstrate a healthy level of profitability for the quarter, especially considering the recent IPO and the operational adjustments that come with it.
Quarter-on-Quarter Performance: A Closer Look at the Trends
Comparing the current quarter’s performance against the preceding quarter (Q4 2024) provides a more nuanced understanding of the company’s operational rhythm.
Q1 2025
Revenue: RM36.44 million
Profit Before Tax: RM7.52 million
Profit After Tax: RM5.74 million
Q4 2024
Revenue: RM83.86 million
Profit Before Tax: RM14.16 million
Profit After Tax: RM10.69 million
As you can see, CBH Engineering experienced a notable decrease in performance compared to the previous quarter:
- Revenue: Down by RM47.42 million, a significant 56.55% decline.
- Profit Before Tax: Decreased by RM6.64 million, or 46.89%.
- Profit After Tax: Reduced by RM4.96 million, or 46.35%.
The company attributes this slowdown primarily to a few factors: certain M&E systems projects nearing completion, while other new projects are still in their early execution stages and have yet to contribute significantly. Additionally, the quarter saw fewer working days due to festive holidays, which impacted project progress. However, the Group anticipates a recovery in subsequent quarters as construction activities are expected to pick up.
Business Unit Performance: M&E Systems in the Lead
CBH Engineering’s revenue continues to be overwhelmingly driven by its M&E Systems segment, which contributed RM36.43 million, or 99.98% of the total Group’s revenue for the quarter. The M&E Maintenance segment made up the remaining 0.02%.
Financial Health: A Stronger Balance Sheet Post-IPO
The IPO has significantly bolstered CBH Engineering’s financial position. As at 31 March 2025, the company’s total assets stood at RM219.81 million, a substantial increase from RM159.57 million at the end of 2024. This growth is largely reflected in the surge in total equity to RM185.78 million from RM99.18 million, thanks to the issuance of new shares during the IPO. Consequently, net assets per share increased to RM0.10 from RM0.05.
Here’s a snapshot of key balance sheet changes:
| Item | 31 March 2025 (RM’000) | 31 December 2024 (RM’000) | Change (RM’000) |
|---|---|---|---|
| Trade Receivables | 60,569 | 32,298 | +28,271 |
| Contract Assets | 55,614 | 75,198 | -19,584 |
| Cash and Bank Balances | 75,887 | 23,973 | +51,914 |
| Trade Payables | 17,576 | 37,623 | -20,047 |
| Contract Liabilities | 11,483 | 3,410 | +8,073 |
From a cash flow perspective, the quarter saw net cash used in operating activities of RM26.32 million, largely due to changes in working capital (increase in receivables, decrease in payables). However, this was more than offset by a substantial net cash inflow from financing activities of RM78.21 million, primarily from the IPO proceeds. This resulted in a net increase in cash and cash equivalents of RM51.93 million, ending the quarter with a healthy cash balance of RM79.34 million.
IPO Proceeds Utilisation
Out of the RM83.44 million gross proceeds raised from the IPO, CBH Engineering has utilized RM16.54 million as of 31 March 2025. This includes funds for procurement of equipment, payments to subcontractors, and listing expenses. A significant balance of RM66.90 million remains unutilized, earmarked for business expansion, including future projects, bank guarantees, and recruitment of personnel over the next 1.5 to 3 years.
Risk and Prospect Analysis: Navigating the Economic Landscape
Malaysia’s economy grew by 4.4% in Q1 2025, supported by domestic spending, investment, and external demand. However, the broader economic outlook for 2025 remains cautious due to escalating global trade tensions and policy uncertainties. While these factors may dampen export performance, offsetting factors like front-loading of electrical and electronics (E&E) exports, increased tourism, and robust domestic demand are expected to provide support. Inflation is projected to remain moderate, though domestic policy measures like fuel subsidy rationalisation could introduce some upward pressure.
Against this backdrop, CBH Engineering remains cautiously optimistic. Their confidence is underpinned by established competitive strengths, sound business fundamentals, and a generally favourable industry outlook, especially with the New Industrial Master Plan 2030 (NIMP) aiming to enhance Malaysia’s competitiveness and focus on high-value sectors like E&E.
The Group’s resilient order book and a significantly increased tender book of RM920 million reflect strong industry demand and their ability to secure projects. The strategic deployment of IPO proceeds is expected to fuel their next phase of growth. CBH Engineering is actively pursuing opportunities in both data center (DC) and non-DC segments, anticipating positive outcomes. However, a key consideration is the potential for delays in tender awards, which could shift the recognition of revenue for some projects to the financial year ending 31 December 2026 instead of 2025. Despite these timing variances, the Group anticipates a resilient performance for the full financial year ending 31 December 2025 and is confident in its longer-term growth trajectory.
Summary and
CBH Engineering Holding Berhad’s first quarter 2025 results present a picture of a newly listed company finding its footing. While the quarter-on-quarter revenue and profit saw a decline due to project cycles and holiday impacts, the underlying profitability remains strong. The IPO has significantly strengthened the balance sheet, providing a healthy cash position and ample funds for future expansion. The company’s focus on M&E systems, coupled with a robust tender book and strategic utilization of IPO proceeds, positions it well to capitalize on opportunities, particularly within the growing E&E and data center sectors in Malaysia.
It’s important for investors to consider the potential for project delays and shifts in revenue recognition, as highlighted by the company. However, the long-term outlook appears positive, supported by national industrial policies and the company’s proactive pursuit of new projects.
Key points to monitor moving forward include:
- The pace of recovery in construction activities and its impact on revenue in subsequent quarters.
- The successful conversion of the substantial tender book into awarded projects.
- The actual timing of revenue recognition for new projects, especially those in the data center segment.
- The effective and efficient utilization of the remaining IPO proceeds to drive business expansion.
- The impact of global trade tensions and domestic policy changes on the broader economic environment.
(Please note: This analysis is for informational purposes only and does not constitute financial advice or . Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.)
Final Thoughts: A Journey Just Begun
CBH Engineering’s journey as a publicly listed company has just begun. While the Q1 2025 report shows a dip from the preceding quarter, it also reveals a financially sound company with strategic plans and a significant war chest from its IPO. The Malaysian economic landscape, though facing external uncertainties, presents opportunities through initiatives like NIMP 2030, which align well with CBH’s core business.
Do you believe CBH Engineering can maintain its long-term growth trajectory despite the near-term project cycle challenges? Share your thoughts in the comments below!
