MGB: Order Book Bolstered by New Project, Positive Analyst Rating Maintained
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
MGB Berhad, a construction company with a notable presence in Saudi Arabia and specialisation in affordable housing, recently secured a significant new contract. This development has led PublicInvest Research to reaffirm its “Outperform” recommendation, citing a robust increase in the company’s order book and sustained earnings visibility.
Project Overview
The company has been awarded an RM118.5 million contract by Uda Accord Development SB for the structural works of an affordable housing project situated at Jalan Jubilee, Kuala Lumpur. The project scope is comprehensive, encompassing the superstructure for a 45-storey residential block containing 702 units, a seven-storey podium car park, amenities floors, and a guardhouse.
Construction for this project is slated to commence in November 2025 and is expected to reach completion within 30 months, by May 2028. Uda Accord Development SB, a joint venture entity affiliated with UDA Holdings Bhd (which is wholly-owned by Malaysia’s Ministry of Finance), is recognised for its dedication to sustainable urban development and providing affordable housing.
Order Book and Financial Outlook
This recent contract win significantly boosts MGB Berhad’s estimated order book to RM1.25 billion, providing substantial earnings visibility for the next two to three years. PublicInvest Research anticipates that this particular job could contribute approximately 3% per annum on average to the company’s earnings from FY26F to FY28F, operating under the assumption of a mid-single-digit pre-tax margin.
Despite the considerable value of the new contract, PublicInvest Research has kept its earnings forecasts for FY25 unchanged. The research house indicated that the award had already been factored into the company’s RM600 million job replenishment target for the current financial year.
Analyst Rating
Reflecting the positive impact of the contract on the order book and the stable financial projections, PublicInvest Research has reiterated its “Outperform” call on MGB Berhad. The investment bank maintained its sum-of-the-parts (SOTP) derived target price at RM0.78, underscoring its continued confidence in the company’s strategic direction and operational performance.
