Southern Score Builders Bhd - DC Contracts Rolling In
Wed, 01-Apr-2026 07:41 am
by Research Team • Apex Research

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SSB8 (0045)

Target Price (RM)

0.81

Recommendation

Buy

SSB8 has secured two construction management services contracts worth a total ofRM189.0m through its 51%-owned subsidiary, SJEE Engineering Sdn Bhd.
 

Assuming a PAT margin of 18%, the contract is expected to contribute c.RM17.4m (or 23.0%of FY26F PAT) over FY26F-FY27F.
 

Maintain BUY recommendation with an unchanged TP of RM0.81, based on 17.6x P/E multiple applied to its FY27F EPS of 4.6 sen, along with a three-star ESG rating.

 

Secures RM189.0m Worth of Projects. Southern Score Builders Bhd (SSB8) has significantly bolstered its data centre portfolio by securing two specialized construction management contracts for a total of RM189.0m through its 51%-owned subsidiary, SJEE Engineering Sdn Bhd. Notably, both contracts were awarded by the same lead contractor, underscoring the Group’s strong reputation and trust placed in its technical execution by key industry partners.

 

The first award, designated as Project A, involves the comprehensive supply, installation, testing and maintenance of electrical systems for a major data centre facility in Cyberjaya. With a subcontract value of RM150.0m, this represents the single largest contract ever secured by the Group’s mechanical and electrical (M&E) division. The project is scheduled for a nine-month execution timeline, commencing on 2 March 2026 and reaching completion by 30 November 2026.

 

The second award, Project B, comprises RM39.0m in additional works for an existing data centre subcontract originally awarded in October 2024. These supplemental works carry the same specialized M&E scope and are expected to be completed by 30 October 2026, spanning an eight month duration. Collectively, these wins highlight the Group’s growing technical reputation in the high specification digital infrastructure space and demonstrate the rapid revenue recognition potential inherent in its specialised engineering segment.

 

Our View. We view these latest contract awards positively as they mark the Group’s sixth win for FY26, significantly strengthening earnings visibility through FY27. At an estimated 18% PAT margin, these projects are slated to contribute RM17.4m in PAT over its duration, after accounting for the Group’s effective share in its subsidiary. This contribution represents a substantial 23.0% of our FY26 forecast. Given the Group’s successful track record in executing previous data centre technical works, we believe execution risk remains minimal. These latest wins bring YTD awards to RM408.6m and bolster the total outstanding order book to a robust RM1.6bn. This consistent win rate underscores the Group’s competitive edge in the high growth technical infrastructure space and reinforces its multi-year growth trajectory.

 

Outlook. We expect the Group to deliver a resilient performance despite prevailing macroeconomic headwinds, underpinned by a substantial RM1.6bn outstanding order book. This represents a robust book-to-bill ratio of 3.4x based on FY26F revenue, providing clear earnings visibility through FY28. We remain optimistic regarding the Group’s order book replenishment pipeline, particularly as it capitalizes on the accelerating data centre rollout and maintains a captive project flow from its strategic related parties, Platinum Victory and Radium Development.

 

Earnings Revision. No change to our earnings revision as this award falls within our orderbook replenishment assumption for FY26 of RM500m.

 

Valuation & Recommendation. We maintain our BUY recommendation on SSB8 with an unchanged TP of RM 0.81, based on 17.6x FY27F EPS of 4.6 sen, along with a three-star ESG rating.

 

Risks. Rising material costs, labour shortages and oversupply of high-rise residential projects in the Klang Valley area.

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