马来西亚股票分析报告

Public Investment Bank has initiated coverage on a leading mechanical and electrical (M&E) engineering services provider with an Outperform rating and a target price of RM0.41. The positive outlook is attributed to the firm’s strong growth trajectory, specialisation in electricity supply distribution systems, and a robust unbilled order book. The target price, based on a c.17x FY26F EPS, represents a c.20% premium to the peer average PER.

Performance Highlights

The company has demonstrated robust financial performance, achieving a compounded annual growth rate (CAGR) of 59% in revenue from FY2021 to FY2024, primarily driven by its M&E systems. Gross profit margins also saw significant improvement, rising from 18.0% in FY2021 to 27% in FY2024. This margin expansion was largely due to higher revenue volumes, enhanced economies of scale, and the execution of more complex, higher-margin substation projects. Looking ahead, analysts forecast a 3-year net profit CAGR of 7.5%, projecting net profit to reach RM51.9 million by FY2027.

Outlook and Strategic Diversification

Future earnings visibility is supported by a substantial unbilled order book of RM450 million for M&E engineering works, which is expected to be recognised over the next one to two years. The company has already secured 89% of its FY2025 replenishment target and holds a tender book of approximately RM827 million, with about 90% of these projects focused on the burgeoning data centre sector. This strong pipeline aligns with the projected growth of Malaysia’s data centre construction market, which is anticipated to expand at a robust CAGR of 15% between 2025 and 2030, reaching RM31.1 billion. Furthermore, the broader M&E engineering industry in Malaysia is expected to grow at a 13.2% CAGR from 2023 to 2026.

While data centre projects form a significant part of the firm’s portfolio, management is actively pursuing diversification by broadening its focus to include projects for Tenaga Nasional Berhad (TNB), specifically 33kV and 132kV initiatives. Although TNB contracts typically carry lower margins, this strategic move aims to diversify revenue beyond data centres and establish a more sustainable, recurring earnings base in the long term.

Key Risks

A key challenge identified is concentration risk, as a high reliance on data centre projects exposes the company to sector-specific boom-and-bust cycles, as evidenced by past share price volatility linked to global AI chip export restrictions. Other risks include intense industry competition, potential project delays that could lead to liquidated damages, and cost overruns on fixed-price contracts which lack price adjustment clauses.