KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Contract Win & Outlook
Pekat Group’s 60%-owned EPE unit has bagged a RM31.3m contract from Tenaga Nasional (TNB) — its third this year — for maintenance and spare parts works involving AIS and GIS switchgear systems. The contract runs for 2 years (with an optional extension).
YTD Job Wins for EPE: RM232m (on track to hit RM300m FY25 target)
Current Order Book: RM504m
Expected GP Margin: 25–30% for this high-margin recurring service job
Riding the RE & Infrastructure Wave
With Malaysia’s LSS5 and LSS5+ solar programs (4x bigger than LSS4) unlocking over RM10b in EPCC potential, PEKAT is pivoting toward high-margin commercial and industrial (C&I) solar projects, while maintaining a ~5% market share.
Switchgear business (EPE) is the game changer:
Among Top 4 MV switchgear suppliers to TNB
Riding on TNB’s RP4 capex cycle
Expected to exceed profit guarantee by 33% (FY25) and 54% (FY26)
Estimated FY25/FY26 profit: >RM10m
Financial Forecasts & Valuation
FY25 Revenue: RM613.4m
FY25 Net Profit: RM55.1m
Core EPS FY25/FY26: 7.2 sen / 8.5 sen
EPS Growth FY25: +109.7%
PER FY25/FY26: 20.8x / 17.6x
TP: RM1.68 (SoP-based)
Current Price: RM1.50 → Upside: +12.8%
Valuation Summary (SoP):
EPCC: RM731m (30x PER)
Switchgear: RM237m (16x PER)
ELP + CGPP + Solar Assets: RM177m
Total: RM1.22b → TP RM1.68/share
Investment Thesis
PEKAT is well-positioned for growth, driven by:
A profitability-focused RE strategy
Underestimated earnings potential from its switchgear arm
Leading share in the ELP segment with long-term growth visibility
Risks:
Reliance on government RE policy
Rising competition in EPCC
Volatility in solar component pricing
ESG Rating: ★★★ (Moderate)
Strong in reliable energy, ethical practices, and emissions management
Areas for improvement: transition to renewables & waste management
Peer Comparison
Company | PER FY25 | EPS Growth FY25 | TP Upside |
PEKAT | 20.8x | +109.7% | 12.8% |
Solarvest | 27.0x | +35.8% | 9.7% |
Samaiden | 25.4x | +12.7% | 16.2% |
Swift Energy | 14.2x | +3.3% | 122.2% |
Takeaway
PEKAT’s record-high order book, strong contract pipeline, and aggressive push into C&I solar and infrastructuremake it a compelling clean energy play. Maintain OUTPERFORM with RM1.68 TP.
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