AWC: Facilities Management Firm Secures Major Contract, Bolstering Future Earnings

Significant Contract Win

A leading facilities management company has announced a significant new five-year contract, valued at RM99.1 million, for the provision of integrated facilities management (IFM) services. This strategic win is set to substantially expand the company’s order book and enhance its earnings visibility over the next several years.

The contract was awarded to the company’s wholly-owned subsidiary by TM Technology Services Sdn Bhd, a subsidiary of Telekom Malaysia Berhad. The services will cover TM Data Centres and Buildings in TM Central 1, commencing on November 1, 2025, and running until October 31, 2030, highlighting the firm’s robust operational capabilities and market positioning.

Financial Impact and Future Outlook

This new contract is expected to boost the company’s order book from RM692.3 million to RM791.4 million, providing a strong 1.9x cover ratio over its FY25 revenue. Furthermore, it is projected to contribute 23.2% of the company’s FY26 full-year revenue target, reinforcing long-term financial stability.

Assuming a 10% margin, the project is anticipated to generate approximately RM9.9 million in earnings throughout its duration. The investment bank noted that this contract win aligned with its expectations, leading to a decision to maintain its earnings forecast.

Investment Recommendation

Despite the positive development of the new contract, the investment bank has maintained its “HOLD” recommendation on the company’s stock. This decision stems from the assessment that the share price had already rallied significantly in anticipation of this announcement. The target price remains at RM0.805, derived based on a P/E ratio of 10.0x pegged to the mid-FY27f EPS of 8.05 sen.