Southern Score Builders Bhd - Solidifying its DC M&E Strength
Tue, 19-May-2026 07:29 am
by Tan Wai Wern • Apex Research

Counter

SSB8 (0045)

Target Price (RM)

0.81

Recommendation

Buy

  • SSB8 secures data centre subcontracting job worth RM47.5m through its 51%-owned subsidiary, SJEE Engineering Sdn Bhd.

  • Assuming a PAT margin of 18%, the contract is expected to contribute c.RM4.4m (or 5.8% of FY26F PAT) over FY26F-FY27F. 

  • The Group adopts a back-to-back procurement strategy by locking in raw material prices upon contract award to mitigate raw material cost volatility.

  • 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 RM47.5m Data Centre Project. Southern Score Builders Berhad (SSBB), through its 51%-owned subsidiary, SJEE Engineering Sdn Bhd (SJEE), has secured a RM47.5m subcontract for specialized data centre works from a local construction firm. The scope of work encompasses the comprehensive supply, installation, testing, and commissioning of electrical, extra-low voltage (ELV), telecommunications, and security systems. The project features a 14-month execution timeline, commencing on 7 May 2026 with targeted completion by 11 March 2027.

 

Our View. We view this latest contract award positively as it marks the Group’s seventh win for FY26, further strengthening earnings visibility through FY27. Assuming an estimated 18% PAT margin and accounting for the Group’s effective stake in its subsidiary, the project is slated to contribute RM4.4m in PAT over its duration, representing 5.8% of our FY26 forecast. 

 

To safeguard profitability against recent volatility in raw material costs, the Group employs a proactive back-to-back procurement strategy, locking in material prices immediately upon contract award to effectively insulate its margins. Given the Group’s established track record in successfully delivering high-specification digital infrastructure, we deem execution risk to be minimal. This contract brings YTD wins to RM456.1m and boosts the total outstanding order book to a robust RM1.6bn, 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 resilient earnings growth amid prevailing macroeconomic uncertainties, supported by its sizeable outstanding order book. This translates to a healthy book-to-bill ratio of 3.5x based on FY26F revenue, providing strong earnings visibility through FY28. We remain optimistic on the Group’s order book replenishment prospects, driven by expanding opportunities in the data centre segment as well as recurring project flows from related parties, Platinum Victory and Radium Development Berhad.

 

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 RM0.81, 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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