Southern Score Builders Bhd - Results In-Line
Fri, 28-Aug-2026 07:34 am
by Research Team • Apex Research

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SSB8 (0045)

Target Price (RM)

0.78

Recommendation

Buy

SSB8 reported a 4QFY26 core net profit of RM21.4m (+84.0% YoY; +8.7% QoQ), bringing FY26 core earnings to RM63.1m (+56.9% YoY). We deem the results to be broadly in line with our expectations, as it accounts for 88% of our full-year forecast and 97% of consensus estimates.

We expect the Group to deliver resilient earnings growth amid prevailing macroeconomic uncertainties, supported by its sizeable outstanding order book of RM1.68bn. This translates to a robust revenue coverage of 3.4x FY26 revenue.

We maintain our FY27F/FY28F/FY29F core net profit forecasts of RM99.7m/RM110.2m/RM143.5m.

We 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.

 

Results Inline. SSB8 reported a 4QFY26 core net profit of RM21.4m (+84.0% YoY; +8.7% QoQ), after adjusting for net foreign exchange loss (RM0.17m), bringing FY26 core net profit to RM63.1m (+56.9% YoY). This accounted for 88% of our full-year estimate and 97% of consensus forecast. Although FY26 core net profit accounted for only 88% of our full-year forecast, we deem the results broadly in line with expectations. The shortfall was mainly attributable to the timing of revenue recognition, as a portion of progress billings and project certifications originally slated for 4QFY26 is now expected to be recognised in 1QFY27F instead.

QoQ. Revenue rose 32.5% to a record RM177.1m from RM133.7m in 3QFY26, driven by higher M&E contribution (+62.5% QoQ), accounting for 54.3% of quarterly revenue, alongside continued turnkey progress. However, 4QFY26 core net profit margin fell 2.64ppt QoQ to 12.1% (from 14.7% in 3QFY26), moderating the flow-through of the strong top-line growth, core net profit grew a comparatively modest +8.7% QoQ to RM21.4m.

YoY. Revenue grew 118.5% to RM177.1m, driven primarily by the M&E segment (+307.7% YoY to RM96.2m) on the back of SJEE's accelerated project execution, and to a lesser extent by turnkey construction services (+62.1% YoY to RM61.6m) on progress from the PV22 Residences, Platinum Melati Residences and PPAM Vista Pelangi Residences projects. FY26 PBT grew 113.5% to RM123.8m, while core net profit grew 84.0% to RM63.1m — a materially slower pace than revenue and PBT growth, reflecting the enlarged NCI base as SJEE and NPS's minority shareholders now absorb a bigger share of Group profit.

YTD. Revenue surged +122.1% to RM491.0m, while CNP grew at a comparatively slower pace of +56.9%. The strong revenue growth was largely driven by SJEE, whose contribution rose to RM225.3m (+386.4% YoY), supported by accelerated project progress following recent contract awards.

Outlook. We expect the Group to deliver resilient earnings growth amid prevailing macroeconomic uncertainties, supported by its sizeable outstanding order book of RM1.68bn. This translates to a robust revenue cover of 3.4x FY26 revenue, providing strong earnings visibility through FY28. We remain positive on the Group’s order book replenishment prospects, underpinned by expanding opportunities in the data centre segment, alongside recurring project flows from its related parties. The Group secured two of its largest-ever data centre contracts in August 2026 and intends to keep riding the tailwinds of the data centre industry, with its tender pipeline remaining highly promising. Separately, management flagged FY26 as a milestone year in the Group's transformation into an integrated EPCC (engineering, procurement, construction and commissioning) player spanning construction, M&E and specialised engineering consultancy via the NPS platform, which should sharpen bid competitiveness for larger, higher-value and more technically demanding projects. Malaysia's structurally growing data centre and digital infrastructure capex, alongside recurring project flows from related parties, should continue to support order intake. That said, margin sustainability bears watching given the enlarged NCI drag from recent M&A (NPS, SJEE) and ongoing cost pressures from raw materials and labour. Notably, the Group’s FY27 YTD contract wins, derived entirely from the M&E segment, stands at c.RM251m, placing the Group in a strong position to achieve our yearly replenishment assumption of RM500m.

Earnings Revision. We maintain our FY27F/FY28F/FY29F core net profit forecasts of RM99.7m/RM110.2m/RM143.5m, with no changes to our earnings assumptions.

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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