PETALING JAYA: HE Group Bhd
’s first contract win this year will earn it RM1mil in profit after tax and minority interest over the contract period.
It accounts for 5.5% of Phillip Capital Research’s full-year 2026 replenishment target of RM230mil, bringing the current outstanding order book to RM100mil.
Backed by a sizeable tender book of about RM850mil, Phillip Capital Research expects the group to secure additional contracts, particularly in semiconductor and data centre (DC) related infrastructure works.
The group via its wholly-owned subsidiary, Hexatech Engineering Sdn Bhd, had accepted a purchase order valued at RM12.6mil for power distribution system works for an electronic products manufacturer.
The contract began on Jan 12, 2026 and is scheduled to be completed by Nov 30 this year.
Although the contract is relatively small, the project strengthens earnings visibility for the year, said the research house.
Maybank Investment Bank Research (Maybank IB) maintains its annual order book replenishment assumption of RM200mil for financial year 2026 (FY26) to FY27, hence leaving its forecasts unchanged.
Looking ahead, it expects replenishment prospects across semiconductor, DC and medical device industries, backed by its RM850mil tender book as at end-October 2025.
Maybank IB reiterated its “buy” call on the stock with a target price of 48 sen a share, pegged to unchanged 15 times FY26 price-to-earnings (PE) ratio in line with sector peers.
Phillip Capital Research also kept its earnings forecast unchanged, as this contract falls within its order book replenishment assumption.
The research house also reiterated its “buy” rating and target price of 51 sen a share, pegged to an unchanged target 14 times PE ratio multiple on 2026 earnings per share.
It views the current valuation at 10 times 2026 PE ratio as undemanding, given the group’s solid track record in semiconductor projects, in tandem with growing exposure to the DC sector and successful penetration in the renewable energy sector.
The key risks cited to its call include slower-than-expected order book replenishment, unforeseen project delays, and pressure on project margins due to cost.
Maybank IB added that the latest win indicates improving job flow from the semiconductor and electronics sector, amid sustained investments in Malaysia’s electrical and electronics and advanced manufacturing ecosystem.
