· SSB8 secured a RM180m main building works for a private hospital development in Melaka, representing the Group’s largest single contract win across any segment in 2026.
· Assuming a 15% net profit margin, the contract is expected to contribute c.RM27.0m in PAT (or c.27.1% of FY27F PAT) over FY27F-FY28F.
· With this contract win, the Group's outstanding orderbook now stands at c.RM1.86bn, providing solid revenue visibility equivalent to a book-to-bill ratio of 3.8x FY26 unaudited revenue.
· 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 RM180m Melaka Hospital Contract. SSB8, through its wholly-owned subsidiary Southern Score Sdn Bhd (“SSSB”), has accepted a letter of award from Radium Hospital Ayer Keroh Sdn Bhd (“RHAK”) to undertake the main building works for a private hospital development at Hang Tuah Jaya, Melaka. The scope covers a phased development comprising a 3-storey car park block and M&E utility building (Phase 1), a 7-storey private hospital building together with ancillary structures (Phase 1A), and a pump house (Phase 1B), with works spanning building construction, external works, M&E installation, aluminium and glazing, interior fit-out, facade treatment, kitchen equipment, and landscaping, among other scope items. The total contract sum is RM180.0m. The project commences on 15 October 2026, with a 19-month contract period and expected completion by 14 May 2028, spanning FY27F and FY28F.
Our View. We view this award positively, as it is the Group's largest single contract win across any segment in 2026 to date, surpassing even the recent run of sizeable M&E data centre contracts. Assuming an estimated 15% net profit margin, we estimate the contract will contribute c.RM27.0m in PAT over its duration, or c.27.1% of our FY27F PAT. The award also confirms that Radium Development Berhad continues to provide the Group with recurring project flow, offering a steadier, more predictable complement to the lumpier, tender-driven M&E order book, while extending the Construction segment into the healthcare infrastructure vertical, alongside its existing residential and civil infrastructure work. Given the comprehensive scope spanning structural works through to specialised fit-out items such as kitchen equipment and facade treatment, we see moderate execution complexity, though this is mitigated by SSSB's established track record and the Group's broader construction management capabilities.
Outlook. This award lifts the Group’s order book to c.RM1.86bn and extends earnings visibility across FY27F and FY28F, complementing the M&E division's recent data centre-led momentum. Taken together, the Group now shows strong concurrent momentum across both of its key engines – M&E, driven by data centre tender conversions, and Construction, increasingly anchored by recurring related party project flow from the Radium group. We view the related party nature of this contract as a double-edged consideration, as it offers a more visible and recurring source of order book replenishment than open tender wins, but also raises the Group's exposure to related party revenue concentration, which investors may increasingly scrutinise as such transactions recur. We remain constructive on the Group's overall order book replenishment prospects, supported by continued data centre opportunities in the M&E division 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. However, we highlight that YTD contract wins of RM431.5m are now tracking close to our FY27F orderbook replenishment assumption of RM500m, despite being less than three months into the financial year. Should this pace of contract wins be sustained, there is a reasonable likelihood of a further upward revision to our FY27F and FY28F replenishment assumptions, and consequently our earnings forecasts.
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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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.056929 | 4.087356 |
| EUR | 4.720659 | 4.723124 |
| CNY | 0.606802 | 0.607109 |
| HKD | 0.517563 | 0.520940 |
| SGD | 3.201349 | 3.222362 |