Cheeding Holdings Berhad - S-Curve Acceleration Fuels 67% QoQ Revenue Jump
Thu, 26-Feb-2026 07:52 am
by Research Team • Apex Research

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CHEEDING (0372)

Target Price (RM)

0.96

Recommendation

Buy

  • CHEEDING’s 3QFY26 CNP came in at RM10.7m, bringing 9MFY26 CNP to RM26.3m, within expectations at 79% of our FY26F forecast, underpinned by a robust 67.1% QoQ revenue jump.

  • We maintain our earnings projections for FY26F–FY28F without further revisions. While margins have normalized due to material-intensive project phases, results are tracking within our upgraded estimates. 

  • Reiterate BUY with an unchanged TP of RM0.96, based on 20x FY27F EPS of 4.8 sen.

     

Within expectations. After adjusting for one-off items (+RM0.3m), CHEEDING’s 3QFY26 core net profit (CNP) came in at RM10.7m, bringing 9MFY26 CNP to RM26.3m. The results were deemed within expectations underpinned by a robust 67.1% QoQ revenue jump to RM41.4m as EPCC projects reached peak execution. 

QoQ. 3QFY26 CNP grew 22.7% as revenue surged 67.1% to RM41.4m, driven by accelerated S-curve recognition in overhead infrastructure EPCC. This growth was partially tempered by a GP margin contraction to 51.7% (from 56.2% in 2QFY26) as projects entered material-intensive phases, with material costs more than doubling to RM16.98m. Additionally, the effective tax rate rose to 30.93% (from 27.92% in 2QFY26) due to non-deductible listing expenses. Consequently, CNP margin contracted to 25.8%, a 9.3 percentage-point decrease from the preceding quarter.

 

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

 

Outlook. We anticipate a robust conclusion to FY26, with 4Q earnings anchored by the ongoing S-curve acceleration of overhead infrastructure projects. The order book remains strong at RM184.5m (1.6x FY25 revenue), diversified across overhead infrastructure (65.2%), underground utilities (18.4%), substations (15.7%), and maintenance (0.8%). While near-term tender activity may remain muted due to rollout timing, momentum is expected to re-accelerate from FY27 onwards, supported by a healthy RM200m tender book. Post-IPO, the Group’s liquidity has surged to RM103.2m, providing the capital necessary for larger-scale national projects. Medium-term visibility is secured by TNB’s RP4 annual capex of RM14.3bn and Malaysia’s 6GW data centre pipeline, both of which is expected to sustain demand for CHEEDING’s specialized EPCC expertise. Furthermore, the strategic use of IPO proceeds for performance bonds and capital expenditure will significantly expand tendering capacity for upcoming substation and underground utility opportunities.

 

Earnings revision. No changes to our earnings forecasts at this juncture. We maintain our FY26F/FY27F/FY28F net profit projections as results are tracking within our upgraded estimates.

 

Valuation & Recommendation. We reiterate our BUY call and our unchanged TP of RM0.96. Our valuation remains pegged on a 20x FY27F EPS of 4.8sen. We continue to remain positive on CHEEDING’s outlook, given its: (i) licensing strength in up to 500kV transmission, (ii) high-margin integrated EPCC model (iii) proven track record of delivering more than 20 national infrastructure projects, and (iv) direct beneficiary status of Malaysia’s energy transition and digital infrastructure growth.

 

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

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