PETALING JAYA: CIMB Securities Research has revised downward its earnings forecasts on KJTS Group Bhd
following the lapse on the group’s proposal to acquire Malakoff Corp Bhd’s subsidiary, Malakoff Utilities Sdn Bhd (MUSB).
On Feb 4, Malakoff announced that the sale and purchase agreement (SPA) for the disposal of its 100% stake in MUSB had fallen through as a result of non-fulfilment of conditions precedent (CPs) upon expiry of the long-stop date on Feb 3, 2026.
“At this juncture, we understand that two CPs were not fulfilled, and that Malakoff does not intend to extend the CP timeline for this SPA,” CIMB Research said in a recent note to clients.
The research house saw the development as negatively impacting KJTS, as previous predictions had assumed the completion of the acquisition in the first quarter of its financial year 2026 (1Q26), as well as the bulk of efficiency-enhancing engineering, procurement, construction, and commissioning (EPCC) upgrade works for MUSB’s district cooling facilities recognised in 2Q26 to 3Q26.
“Following this development, we cut our financial year 2026 (FY26) to FY28 earnings per share estimates by 6.1% to 38.2% to reflect the removal of previously anticipated EPCC contributions from the refurbishment of MUSB’s cooling energy assets, earnings contribution from MUSB’s operations, and benefits from improved economies of scale,” it said.
KJTS had announced back in 2025 its intention to acquire MUSB for RM65.5mil.
CIMB Research, which maintained its “buy” call on KJTS, said KJTS’s recent 44.8% share price pullback has already priced in the news. The research house also said its long-term growth outlook on the company remained intact.
