| Key Investment Information | |
|---|---|
| Investment Bank | TA SECURITIES |
| TP (Target Price) | RM0.25 |
| Last Traded | RM0.20 |
| Recommendation | |
The company has reported robust financial results for the third quarter of 2025, with earnings significantly exceeding expectations. This strong performance, coupled with a growing order book and strategic expansion into new geographies, has led to a maintained “BUY” rating from AmInvestment Bank, with a revised target price of RM6.45 per share, up from RM6.00. The current trading price stands at RM5.30, reinforcing confidence in sustained growth and strategic initiatives.
Performance Review
For the third quarter of 2025, core earnings saw a substantial 34% quarter-on-quarter increase. This strong rebound reflects an anticipated ramp-up in second-half project executions, with momentum expected to carry into the fourth quarter. Year-to-date, the nine-month 2025 core earnings reached RM102 million, an 11% year-on-year increase, aligning broadly with both AmInvestment Bank’s and consensus forecasts (70% and 69% respectively). The Patami (Profit After Tax and Minority Interests) margin widened by 2.2 percentage points year-on-year, primarily supported by stronger market opportunities that allowed the group to prioritize higher-value projects.
Future Outlook and Order Book Strength
The group’s order book expanded by an impressive 23% quarter-on-quarter to RM1.64 billion, extending earnings visibility well into 2027. This growth underscores the management’s successful push into new geographies. New orders secured in the first nine months of 2025 have already surpassed the full-year total of RM1.01 billion recorded in FY24, reaching RM1.14 billion. A key upcoming catalyst is the RM1.5 billion German tender, with results anticipated by January 2026. While the overall tender book moderated slightly, this is primarily attributed to projects either secured or dropped, and the pipeline remains robust as the group continues its geographical expansion. Opportunities in Japan, France, Italy, and Spain are actively being pursued, complementing a significant addressable market of US$6.3 billion within the US$125 billion semiconductor fab opportunities.
Financial Strength and Strategic Optionality
The company’s financial position remains strong, with net cash rising 28% year-to-date to RM293 million. This cash pile is expected to grow further, with an additional RM130 million anticipated from currently deep-in-the-money warrants. Beyond shareholder returns, management is actively exploring mergers and acquisitions (M&A) opportunities in the United States. This strategic move aims to capitalize on reshoring trends, expand the company’s addressable market, and unlock new growth dimensions.
