Southern Score Builders Bhd - SSB8 Starts FY27 with RM146.5 Million Data Centre Win
Fri, 07-Aug-2026 07:53 am
by Research Team • Apex Research

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SSB8 (0045)

Target Price (RM)

0.78

Recommendation

Buy

  • SSB8 secured a RM146.5m data centre subcontract through its 51%-owned subsidiary, SJEE Engineering Sdn Bhd - the second-largest contract in the M&E division's history.

  • Assuming a 18% net profit margin, the contract is expected to contribute c.RM13.5m in PAT (or c.13.5% of FY27F PAT) over FY27F-FY28F.

  • The Group's remaining tender book stands at c.RM382m, pointing to a continued replenishment pipeline into FY27.

  • Maintain our BUY recommendation on SSB8 with an unchanged TP of RM0.78, based on unchanged 17.6x P/E multiple applied to FY27F EPS of 4.4 sen.

 

Secures RM146.5m Data Centre Contract. SSB8, through its 51%-owned subsidiary, SJEE Engineering Sdn Bhd (“SJEE”), has accepted a letter of award from a local construction company to undertake a Subcontract Works Electrical Package 3 Works (MV) for a data centre project, at a total subcontract sum of RM146.5m. The project commenced on 27 July 2026 and is expected to complete by 15 January 2028, a c.18-month execution window falling within FY27 and FY28. 

 

Our View. We view this award positively, as it is the second-largest contract secured in the M&E division's history, trailing only the RM150.0m job won earlier in 2026. Together with two other data centre wins, the Group has now secured four data centre jobs in 2026 worth a cumulative RM383.0m, underscoring SJEE's deepening execution track record and client relationships in the high-tech and data centre space. More importantly, the award further reinforces SJEE's position as an increasingly established M&E contractor within Malaysia's fast-growing data centre ecosystem, improving earnings visibility beyond its traditional building construction business. Assuming an estimated 18% net profit margin and accounting for the Group's 51% effective stake in SJEE, we estimate the contract will contribute c.RM13.5m in PAT over its duration, or c.13.5% of our FY27F PAT.

 

Outlook. Excluding this Contract, the M&E division's order book stood at a record RM339.2m as at June 2026, on top of RM456.1m of order book replenishment already achieved in FY26. The Group's tender book stands at c.RM382m, indicating a continued pipeline of data centre and M&E opportunities to be converted into further order book wins over the coming quarters. Management has already begun expanding its M&E talent pool to capture further opportunities, and structural demand for data centres in Malaysia continues unabated. SJEE's track record of eight contract wins since June 2025, spanning both greenfield and continuation projects for repeat customers, suggests that the Group is capturing a growing share of this opportunity set, aided by its BIM capabilities and demonstrated execution on high-specification digital infrastructure. We remain constructive on the Group's order book replenishment prospects, supported by expanding data centre opportunities and recurring project flows from related parties.

 

Earnings Revision. No change to our earnings revision as this award falls within our orderbook replenishment assumption for FY27F of RM500m. We separately introduce FY29F CNP at RM143.5, with an orderbook replenishment assumption of RM600m. We believe a step-up in the replenishment run-rate is justified by: (i) the Group's demonstrated ability to scale contract wins, with cumulative M&E wins of RM456.1m; (ii) structural, multi-year growth in Malaysia's data centre and high-tech infrastructure capex cycle, where SJEE has built a differentiated execution track record across eight wins since June 2025; and (iii) management's stated intent to continue expanding its M&E talent pool and delivery capacity, positioning the Group to capture a broader base of opportunities as it approaches FY29F.

 

Valuation & Recommendation. We maintain our BUY recommendation on SSB8 with an unchanged TP of RM0.78, based on unchanged 17.6x P/E multiple applied to a FY27F EPS of 4.4 sen, alongside 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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