Cheeding Holdings Berhad - Within Expectations
Mon, 06-Oct-2025 09:09 am
by Tan Sue Wen, Ong Tze Hern • Apex Research

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CHEEDING (0372)

Target Price (RM)

0.73

Recommendation

Buy

  • CHEEDING’s 1QFY26 CNP stood at RM6.9m, which was within expectations, accounting for 23% of our FY26F earnings forecast.

  • Outlook stays positive, anchored by RP4’s doubled average annual capex allocation and rising infrastructure demand from around 150 planned data centres and new industrial parks nationwide.

  • The tender book is healthy at about RM350m, while the upcoming IPO is expected to ease performance bond limitations and expand tendering capacity, thereby strengthening the Group’s ability to pursue larger-scale projects and multi-year growth opportunities.

  • Maintain BUY recommendation with an unchanged target price of RM0.73, based on 17x FY27F EPS of 4.3sen.

 

Within expectations. After adjusting for one-off items (+RM0.1m), CHEEDING’s 1QFY26 core net profit (CNP) came in at RM6.9m, which was within expectations, accounting for 23% of our FY26F earnings forecast.

 

QoQ. Not applicable, as CHEEDING was only recently listed and no prior quarterly comparison is available.

 

YoY. Not applicable, as CHEEDING was newly listed with no corresponding period for comparison.

 

Outlook. CHEEDING’s earnings momentum is expected to remain strong in the coming quarters, supported by progressive revenue recognition from ongoing EPCC projects that have entered the accelerated execution phase. Order book replenishment should pick up from FY27 onwards, underpinned by post-IPO proceeds that enhance bidding capacity and a typical 3–6-month tender-to-award cycle. Prospects remain favourable, anchored by RP4’s doubled average annual capex allocation of RM14.3bn and rising infrastructure demand from around 150 planned data centres and new industrial parks nationwide. These trends should sustain demand for CHEEDING’s EPCC expertise in overhead infrastructure, substations, and underground utility works. The Group’s order book of ~RM200m and tender book of ~RM350m provide healthy visibility, positioning CHEEDING well to capture larger-scale projects ahead.

 

Earnings revision. No change, given that reported earnings came within expectations.

 

Valuation & Recommendation. Maintain our BUY recommendation on CHEEDING with an unchanged TP of RM0.73, based on 17x FY27F EPS of 4.3sen. We are positive on CHEEDING’s outlook, given its: (i) licensing strength in up to 500kV transmission, (ii) integrated coverage across overhead transmission, underground utilities, and substations, positioning CHEEDING as a one-stop EPCC provider, (iii) proven track record of delivering more than 20 national infrastructure projects, and (iv) strong core net margins (>20%) well above sector averages.

 

Risks. Customer Concentration Risk. Dependence on regulatory and public sector infrastructure spending. Cost overrun risk.

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