PEKAT has secured a RM33.8m subcontract for earthing and lightning protection works at a hyperscale data centre in Puncak Alam, Selangor. The project will commence in November 2025, with substantial completion scheduled for February 2027 (Facility 1) and September 2027 (Facility 2).
We view this positively as it strengthens PELP’s position in the data centre segment and supports earnings visibility through FY27F.
No changes to our earnings forecasts, as the contract win is within our expectations.
Maintain HOLD, with a revised target price of RM1.68 (from RM1.72) based on SOP valuation, after accounting for dilution from the recent private placement and ESOS exercise.
Secures RM33.8m Earthing & Lightning Protection Subcontract. PEKAT, via its indirect wholly owned subsidiary Pekat E & LP Sdn Bhd (PELP), has secured a RM33.8m subcontract from Gamuda Engineering Sdn Bhd for the construction, testing, commissioning and setting-to-work of the earthing and lightning protection systems for a hyperscale data centre at Eco Business Park V, Puncak Alam, Selangor. The subcontract commences in November 2025, with Facility 1 targeted for trade completion by 16 Dec 2026 and Facility 2 by 15 Apr 2027. This will be followed by substantial completion targeted by 28 Feb 2027 for Facility 1 and 1 Sep 2027 for Facility 2. The contract carries a 36-month and 30-month defects liability period for Facility 1 and Facility 2, respectively.
Our Take. We view this as a positive development for PEKAT, as it strengthens the Group’s earnings visibility through FY27F. Assuming a 30% GP margin, the RM33.8m subcontract is expected to generate c.RM10.1m in gross profit over the 22-month duration, representing 6.3% of our FY25F forecast. With this latest win, PEKAT’s unbilled order book increases to RM784.5m, equivalent to 2.7x FY24 revenue, providing solid earnings support over the next three years.
Outlook. This contract further strengthens PELP’s position in the data centre segment. PELP has a proven track record in delivering earthing and lightning protection works for several hyperscale data centres, and it continues to serve as PEKAT’s third core business alongside solar EPCC and power distribution under EPE Switchgear. Malaysia’s data centre industry remains on a strong growth path. Global hyperscale players are increasing their capex for AI, with total spending expected to exceed USD300bn in 2025, up c.25% YoY. Major names like AWS, Alphabet and Meta continue to scale up cloud and AI investments. Locally, Malaysia is attracting large commitments, including Microsoft’s second cloud region in Johor (Southeast Asia 3), while Sedenak and Nusajaya are seeing ongoing hyperscale expansion. This supports Malaysia’s planned c.6GW data centre pipeline over the next few years. PELP is usually involved at the early stage of data centre construction, where earthing and lightning protection are critical-path works. As more hyperscale and AI-driven facilities come in, we expect PELP to continue seeing steady tender opportunities.
Earnings revision. We make no changes to our earnings forecasts, as this contract win is already captured within our FY25F PELP order-book replenishment assumption of RM70m. We have also incorporated the recent corporate exercises, namely the private placement and ESOS, which collectively raised RM81.1m, into our projections.
Valuation & Recommendation. After accounting for the dilution from the private placement and ESOS shares exercised, we derive a new TP of RM1.68 (from RM1.72) based on SOP valuation and supported by a three-star ESG rating. Maintain HOLD. We continue to favour PEKAT for its synergistic business model, strong margins in the Power distribution division, and sustainable order book. PEKAT’s strong historical financial results qualify the Group for a transfer to the Main Market of Bursa Malaysia.
Risks. Heavy reliance on government initiatives. Inability to secure new contracts. Spike in raw material costs such as copper and steel.
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