CBHB has secured a RM194.7m contract for the EPCC of a 275kV consumer substation to support a proposed data-centre (DC) in Selangor. The contract win lifts its unbilled order book to RM430m, equivalent to 1.6x FY24 revenue.
Based on a conservative GP margin of 25%, they are projected to generate a total GP of c.RM48.7m across the 17-month contract.
Following the recent contract win, CBHB has exceeded our order book replenishment assumption of RM254m for FY25F. We raise our FY25F replenishment assumption to RM405m, while maintaining our projections for FY26F and FY27F. As a result, our earnings forecasts are revised upward by 0.7%/9.6%/1.0% for FY25F/FY26F/FY27F respectively.
Maintain BUY recommendation with a revised target price of RM0.41 (from RM0.38), based on 15x FY26F EPS of 2.8sen and supported by a three-star ESG rating.
RM194.7m Contract. CBHB has been awarded a contract valued at RM194.7m by a Malaysian company for the EPCC of a 275kV consumer substation to support a proposed data-centre (DC) in Selangor. The scope of work includes the supply, erection, installation, testing, and commissioning of all substation equipment and associated works for the electrical supply system. The contract is set to begin on 5 Aug 2025, with targeted completion by 31 Dec 2026.
Our Take. We view the contract award positively, as it should sustain CBHB’s earnings growth through FY26F. Based on a conservative GP margin of 25%, they are projected to generate a total GP of c.RM48.7m across the 17-month contract. This is expected to translate into c.RM12.2m to be recognised in FY25 (17% of our FY25F forecast) and c.RM36.5m in FY26 (36.3% of our FY26F forecast). We anticipate no execution challenges, given CBHB’s strong track record of successful execution and timely delivery. Incorporating the recent win, CBHB’s outstanding order book is estimated at RM430m, representing 1.6x of FY24 revenue.
Outlook. We expect DC job momentum to remain strong in the foreseeable future, supported by continued hyperscaler investments in AI infrastructure. To date, four major hyperscalers that we actively track have committed over USD15bn to Malaysia (Amazon USD6.2bn, Microsoft USD2.2bn, Google USD2.0bn and Oracle USD6.2bn). Additionally, the US AI Action Plan, which streamlines AI chip exports, is expected to further support sector growth. These investments are driving sustained demand for power-infrastructure services among electrical contractors.
We see CBHB as a prime beneficiary of ongoing DC expansion, supported by its strong exposure to the sector and established track record in delivering HV substation projects. The Group is well-positioned to capture additional high-value contract wins, particularly as Johor’s adoption of Tier IV DCs drives demand for more technically complex, higher-specification power infrastructure. CBHB’s tender book remains robust at c.RM700m, with the majority linked to DC-related projects.
Earnings revision. Following the recent contract win, CBHB has exceeded our order book replenishment assumption of RM254m for FY25F. We raise our FY25F replenishment assumption to RM405m, while maintaining our projections for FY26F and FY27F. As a result, our earnings forecasts are revised upwards by 0.7%/9.6%/1.0% for FY25F/FY26F/FY27F respectively.
Valuation & Recommendation. We have revised our target price upward to RM0.41 (from RM0.38) following our earnings adjustment, based on 15x FY26F EPS of 2.8sen and supported by a three-star ESG rating. Maintain our BUY recommendation. We remain positive on CBHB, given its (i) strategic role as a proxy for Malaysia’s rising power demand, (ii) established track record in delivering HV substations tailored for DC operators, and (iii) robust supplier relationships that enable cost-efficient procurement.
Risks. High exposure to the DC sector, inability to secure new contracts, and unexpected project delays.
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