• SSB8 secured a RM40m data centre subcontract at Nilai, Negeri Sembilan – the M&E division's sixth data centre win of 2026, taking cumulative 2026 data centre wins to RM528.0m.
• Assuming an 18% net profit margin, the contract is expected to contribute c.RM3.7m in PAT (or c.3.7% of FY27F PAT) over FY27F.
• With this contract win, the Group's outstanding orderbook now stands at c.RM1.90bn, providing solid revenue visibility equivalent to a book-to-bill ratio of 3.9x 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 RM40m Data Centre Contract in Negeri Sembilan. SSB8, through its 51%-owned subsidiary, SJEE Engineering Sdn Bhd (“SJEE”), has accepted a letter of award from a local construction company to undertake subcontract works described as supply, delivery, installation, testing & commissioning, maintenance and warranty of electrical works for a data centre project located at Nilai, Negeri Sembilan, at a total subcontract sum of RM40m. The project's stated commencement date is 1 April 2026, with expected completion by 20 April 2027, contributing positively to the Group's earnings from FY27 onwards until completion.
Our View. We view this award positively, as it is a continuation of SJEE's steady order book replenishment in the high-tech and data centre space rather than a step-change in contract size. 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.RM3.7m in PAT over its duration, or c.3.7% of our FY27F PAT forecast – a modest but incremental addition on top of the Group's recent largerticket wins. We view execution risk as low given the contract's smaller scale relative to SJEE's recent data centre awards, and see this as evidence that the division continues to convert opportunities across a range of deal sizes, not solely on marquee-sized contracts.
Outlook. The Group's total order book now stands at c.RM1.90bn, comprising RM1.23bn from Construction, RM630.7m from M&E, and RM40.5m from Specialised Engineering Solutions. We continue to view the Group's two main engines as complementary rather than overlapping: the M&E division is replenishing steadily through a string of data centre wins ranging from single-digit millions to over RM150m per contract, while the Construction division replenishes more periodically through larger, less frequent wins such as the recent Melaka hospital contract. Together, we believe this dual-cycle replenishment profile broadens and smooths the Group's earnings visibility relative to a business reliant on a single order book stream. The tender pipeline for data centre opportunities remains active, and structural demand for data centres in Malaysia continues unabated, supporting our constructive view on order book replenishment prospects into FY27F and beyond.
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 RM471.5m 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 | 4.059912 | 4.092391 |
| EUR | 4.674546 | 4.683843 |
| CNY | 0.608571 | 0.609185 |
| HKD | 0.517481 | 0.521624 |
| SGD | 3.182535 | 3.208138 |