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| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading engineering group’s wholly-owned subsidiary, Qudotech Sdn Bhd, has successfully secured a significant subcontract valued at RM42.3 million from Gamuda Engineering Sdn Bhd. This contract involves the provision of cold water, rainwater harvesting, and sanitary systems for a hyperscale data centre located at Eco Business Park V, Puncak Alam, Selangor.
This latest award marks the group’s eighth contract win for the financial year 2026 (FY26) and its second data centre project from the returning client, Gamuda Engineering. This achievement elevates the cumulative job wins for FY26 to approximately RM424 million, underscoring the group’s robust performance in securing high-value projects.
Project Details and Strategic Impact
The RM42.3 million subcontract is scheduled to commence on 8 December 2025 and will be executed in two distinct phases. Facility 1 is targeted for completion by 28 February 2027, with Facility 2 following by 1 September 2027. This phased approach provides a clear roadmap for project execution and revenue realization.
Analysts from M+ Global (Malacca Securities) view this contract win positively, highlighting its role in strengthening the group’s Engineering Division. The project significantly enhances the group’s exposure to Malaysia’s rapidly expanding hyperscale data centre segment, a key growth area. The repeat order from a prominent client like Gamuda Engineering Sdn Bhd also serves as a testament to the group’s proven execution capabilities and strong track record in delivering complex Mechanical & Electrical (M&E) related works.
Financial Outlook and Recommendation
The contract’s duration, spanning FY26 to FY28, offers significant earnings visibility for the Engineering Division. Assuming a conservative net profit margin of 10%, this specific contract is projected to contribute approximately RM4.2 million to the group’s earnings during the period.
M+ Global (Malacca Securities) has maintained its “BUY” recommendation on the stock, with an unchanged target price of RM0.66. This valuation is derived based on a price-to-earnings (P/E) ratio of 10.0x, applied to a mid-FY27f fully-diluted earnings per share (EPS) of 6.58 sen. The contract win aligns with the investment bank’s expectations, leading to the maintenance of their earnings forecast.
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