PETALING JAYA: Pekat Group Bhd
’s three year profit compounded annual growth rate of 45% is underpinned by its RM745mil order book.
This represents 2.6 times of 2024 revenue and margin expansion from operating leverage and higher margin power distribution segment, said Maybank Investment Bank Research (Maybank IB).
Maybank IB initiated coverage on Pekat for its strong presence in high-growth sectors which position the group well to benefit from Malaysia’s evolving energy landscape.
It has a “buy” call with a target price (TP) of RM1.98 a share.
Its valuation places Pekat’s sum-of-the-parts valuation based TP of RM1.98 a share at 25 times 2026 price-to-earnings (PE) ratio.
This is in line with local solar engineering, procurement, construction, and commissioning peers’ valuation at 21 to 27 times 2026 PE.
Risks to its call include project execution, supply chain, and stiff margin competition risks.
Pekat’s dominant more than 50% market share in local earthing and lightning protection systems market, positions it well to benefit from the 7.1 gigawatts data centre (DC) pipeline as more DC progresses into mechanical and electrical fit-out stage in 2026 to 2027.
While its newly acquired EPE Switchgear (M) Sdn Bhd is fast emerging as a key revenue driver (26% to 35% of group 2025 to 2027 revenue), supported by its 40% market share among Tenaga Nasional Bhd’s medium voltage switchgear suppliers.
Maybank IB believes Pekat is well positioned to ride on Malaysia’s accelerating grid infrastructure upgrade which aligns with the nation’s growing renewable energy adoption and increase in electricity demand.
Pekat’s exposure in the solar photovoltaic segment has been driven by its expanding presence in the commercial & industrial (C&I) and residential rooftop segments to focus on better profitability.
The recently revised TNB tariff structure has accelerated the adoption of solar plus battery energy storage systems in the C&I segment to mitigate maximum demand charges.
The introduction of Solar Accelerated Transition Action Programme is expected to rejuvenate demand for residential rooftop solar.
Notwithstanding this focus, Pekat is also selectively participating in utility-scale solar projects to capture incremental opportunities from large scale solar 5 plus (LSS5+), LSS6, and Corporate Renewable Energy Supply Scheme, it added.
For its third quarter ended Sept 30, 2025, Pekat’s net profit rose to RM10.27mil from RM6.25mil in the previous coressponding period, while revenue grew to RM141.70mil from RM82.64mil a year earlier.
