· PEKAT’s 6MFY26 CNP of RM26.0m (+17.6% YoY) came in broadly within expectations, accounting for 50.7% of our and 47.0% of consensus full-year estimates. Earnings were mainly supported by continued progress billings from ongoing solar EPCC projects, alongside stronger contributions from the ELP and trading segments.
· PEKAT remains well-positioned to benefit from LSS6/CRESS opportunities and rising data centre-related infrastructure demand.
· We keep our FY26–28F earnings forecasts of RM51.4m/RM64.0m/RM70.7m unchanged, pending a management meeting for further guidance.
· Maintain our BUY rating with an unchanged TP of RM1.88, pending a management meeting to further understand the Group's prospects and guidance.
Broadly Inline. PEKAT reported a 2QFY26 core net profit (CNP) of RM13.7m (+11.7% QoQ, +26.5% YoY) after adjusting for several EIs amounting to -RM0.58m. This brought 6MFY26 CNP to RM26.0m (+17.6% YoY). The results were broadly in line, accounting for 50.7% of our and 47.0% of consensus full-year estimates. Earnings growth was primarily supported by continued progress billings from ongoing solar EPCC projects, alongside stronger contributions from the ELP and trading segments.
QoQ. Revenue rose 4.5% QoQ to RM175.4m, as stronger contributions from the ELP (+61.9% QoQ), the Power (+42.9%), and trading (+20.4% QoQ) segments more than offset an 18.7% QoQ decline in the EPCC segment, which reflected slower progress recognition during the quarter. Core net profit rose 11.7% QoQ to RM13.7m, supported by a more favourable segment mix and disciplined cost management. Consequently, core PATMI margin improved to 7.8% from 7.3% in 1QFY26.
YoY. Revenue increased 38.1% YoY to RM175.4m, underpinned by broad-based growth across all segments, led by the EPCC segment (+34.2% YoY to RM84.0m) on accelerated progress recognition under the CGPP project, alongside the ELP (+67.2% YoY) and trading (+33.8% YoY) segments. Core net profit grew 26.5% YoY to RM13.7m, while core PATMI margin eased to 7.8% from 8.6% in 2QFY25 on a higher revenue base and changes in segment mix.
YTD. For 1HFY26, revenue grew 23.8% YoY to RM343.3m, driven by broad-based growth across all segments, led by the EPCC segment (+20.6% YoY to RM187.4m), followed by the ELP (+29.5% YoY to RM40.2m) and trading (+28.1% YoY to RM36.0m) segments. Core net profit rose 17.6% YoY to RM26.0m, while CNP margin eased to 7.6% from 8.0% in 6MFY25 on a higher revenue base and changes in segment mix.
Outlook. We stay constructive on PEKAT’s medium-term prospects, underpinned by solid earnings visibility from its sizeable outstanding orderbook and a healthy tender pipeline as the LSS rollout cycle progresses, including potential participation in LSS6 and CRESS-related developments. The broad-based growth delivered across the EPCC, ELP and trading segments in 1HFY26 reinforces our confidence in the earnings trajectory into 2HFY26. We continue to view the Group as a prime beneficiary of Malaysia’s accelerating renewable energy adoption, as corporates increasingly pursue cleaner and more reliable energy solutions. Beyond its core solar EPCC operations, we see rising contribution potential from PEKAT’s engineering-related segments, supported by growing investment into Malaysia’s digital infrastructure ecosystem; the Group’s expanding exposure to data centre-related projects should further strengthen earnings diversification while reinforcing demand for its specialised electrical and protection solutions. That said, we expect competition within the renewable energy space to remain intense, keeping execution discipline and margin preservation front of mind.
Earnings revision. We make no changes to our FY26-28F core net profit forecasts of RM51.4m/RM64.0m/RM70.7m for now, as we await further clarity from management on the Group’s outlook.
Valuation & Recommendation. We maintain our BUY rating with an unchanged TP of RM1.88, despite the stock’s upside narrowing to below 10%, pending our meeting with management. We will reassess our forecasts and recommendation thereafter.
Risks. Delays in renewable energy project rollouts, inability to replenish orderbook, intensifying competition within the solar EPCC space and higher financing costs arising from asset expansion initiatives.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.065852 | 4.097386 |
| EUR | 4.589381 | 4.597416 |
| CNY | 0.610175 | 0.610647 |
| HKD | 0.518032 | 0.522054 |
| SGD | 3.177971 | 3.202709 |