SSB8: Construction Firm’s Order Book Bolstered by New Data Centre Win, Buy Rating Reaffirmed
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.75 (+36.4%) |
| Last Traded | RM0.55 |
| Recommendation |
Southern Score Builders (SSB8 MK) has secured a new RM102.7 million Mechanical & Electrical (M&E) contract for a data centre located in the central region. This significant win marks a key milestone, substantially bolstering the company’s order book and affirming its strategic expansion into the rapidly growing data centre sector.
Contract Details and Financial Impact
The latest contract brings Southern Score’s year-to-date new wins to RM122 million, fulfilling 12% of the full-year FY26E replenishment assumption. This new addition elevates the outstanding order book to an impressive RM1.5 billion, which translates to a robust 6.6 times its FY25 revenue cover. The project, undertaken by the company’s 51%-owned subsidiary SJEE Engineering (SJEE), encompasses the supply, installation, testing, commissioning, maintenance, and warranty of electrical works. It commenced in April 2025 and is slated for completion by the fourth quarter of 2026. Analysts estimate that this data centre project will contribute approximately RM10 million to the company’s Profit After Tax (PAT) across FY26-27E, assuming a 10% PAT margin for such specialised projects.
Future Outlook and Order Pipeline
The company’s prospects for further replenishment remain strong. Southern Score is actively pursuing an additional RM100-150 million M&E package from the same data centre client for another central region project. Beyond this, a substantial RM1.2 billion tender pipeline further supports growth, comprising data centre (39%), residential (30%), and government-related building (30%) projects. The strategic focus on the fast-growing data centre sector, coupled with existing anchor clients, provides robust order book visibility.
Analyst Recommendation
TA Securities maintains its BUY rating on Southern Score Builders with an unchanged target price of RM0.75, pegged to a target 18x PE multiple on FY27E EPS. The current target price implies a total return of 36.4% from the last traded price of RM0.55. The investment bank highlights the company’s strategic positioning within the data centre market and strong order book. Key risks to this positive outlook include unforeseen changes in government policies and fluctuations in raw material prices.
