| Investment Bank | PhillipCapital |
|---|---|
| TP (Target Price) | RM0.75 (+23.0%) |
| Last Traded | RM0.61 |
| Recommendation |
Southern Score Builders (SSB) has successfully secured a new RM97.6 million contract for electrical and extra-low voltage (ELV) works for a data centre (DC) project. This significant win marks the group’s first DC contract for fiscal year 2026 (FY26) and underscores its strategic expansion into the rapidly growing DC sector.
The new project, awarded to SSB’s 51%-owned subsidiary, SJEE, encompasses the supply, installation, testing, commissioning, maintenance, and warranty for the data centre’s ELV systems. The work commenced in October 2025 and is slated for completion by December 2026.
Order Book and Financial Impact
With this latest addition, SSB’s year-to-date contract wins have reached RM235 million, fulfilling approximately 21% of PhillipCapital’s FY26E replenishment assumption of RM1.1 billion. This bolsters the company’s outstanding order book to an impressive RM1.6 billion, providing a substantial 7.2 times coverage of its FY25 revenue. The project is estimated to contribute RM14.6 million in net profit over its duration, assuming a 15% net profit margin.
This contract further enhances SSB’s DC order book to RM300 million, representing 19% of the group’s total order book, and solidifies its track record in delivering complex DC projects.
Strategic Positioning and Outlook
PhillipCapital analysts reiterated their BUY rating on Southern Score Builders with an unchanged target price of RM0.75, pegged to an 18x PE multiple on FY27E earnings per share (EPS). The investment bank views this contract as falling within its existing replenishment assumptions, thus maintaining its earnings forecasts.
The positive outlook is driven by SSB’s strategic focus on the fast-growing DC sector, coupled with robust order book visibility from existing anchor clients like PV and Radium. The company also benefits from healthy replenishment prospects, supported by a diversified tender book of RM702 million, with contributions from DC (29%), residential (36%), and government-related buildings (36%).
However, key risks to the ‘Buy’ call include potential unforeseen changes in government policies and fluctuations in raw material prices, which could impact project profitability and timelines.
