PETALING JAYA: KKB Engineering Bhd
will likely benefit from more Sarawak-based projects this year if things go as planned.
There is an opportunity from an allocation of RM6bil for Sarawak which is an increase from RM5.9bil last year.
Apart from this, RHB Research had noted several opportunities which may help to rerate the company’s stock.
These included faster-than-expected wins from the fabrication of oil & gas wellhead platforms (WHPs), with Petroliam Nasional Bhd (PETRONAS) earmarking four and six WHPs to be fabricated this year and the next.
“Also, PETRONAS has launched the Malaysia Bid Round 2026, which also features three high-potential blocks located in the West Sarawak Basin,” it said.
It also estimated KKB’s remaining order book to be worth approximately RM345mil compared to an estimated outstanding order book of RM55mil as of end of the fourth quarter of 2025 following the latest contract wins in last month.
Meanwhile, KKB’s tender book for engineering, construction and manufacturing jobs is valued at around RM1.9bil, while another RM212mil worth of tenders are related to oil and gas fabrication projects – which cover projects in Sabah and Sarawak.
“KKB reported a core net profit of RM15mil which is a 43% decline year-on-year for the financial year 2025 (FY25) which met expectations – making up 99.9% of our projections.
“After a quiet FY25 with many projects reaching their tail-end, we expect KKB to continue undergoing a reset as the group has already clinched a circa RM292mil worth of new jobs in January,” RHB Research said.
It did not change earnings estimates on the company and introduced its FY28 forecast earnings, which includes a RM350mil job replenishment assumption.
Its target price of RM1.42 per share is unchanged and is derived by pegging FY26 forecast earnings per share to an unchanged target price to earnings ratio of 17 times.
KKB’s target price to earnings ratio is near the Bursa Malaysia Industrial Production Index’s ten-year mean, it noted.
