PETALING JAYA: Prospects for Steel Hawk Bhd
are expected to strengthen over the coming financial year as oil and gas (O&G) activity rebounds, potentially rebalancing its revenue mix while a healthy order book and emerging opportunities in data centre projects support earnings visibility.
TA Research said the company’s expanded engineering, procurement, construction and commissioning (EPCC) segment had been the main earnings driver in the past year, but should normalise as the O&G segment regains momentum.
It maintained a “buy” call on the stock, with an unchanged target price of 41 sen, based on 8.5 times 2026 forecast earnings per share.
“Throughout 2025, the expanded EPCC segment has contributed significantly to the group, accounting for 77% (RM94mil) of total revenue,” the research house said in a note.
“However, this contribution is expected to decline to around 45%-55% in 2026 as O&G activities gain traction,” it added.
According to TA Research, Steel Hawk’s management has correspondingly shifted its focus back to O&G, where improving industry conditions could translate into new contract wins.
The group expects potential contract awards of up to RM150mil within 2026 as activity strengthens.
Steel Hawk’s exposure within O&G remains largely concentrated in downstream operations, which account for about 85% to 90% of its involvement in the sector, reflecting its stronger positioning in plant maintenance and related services.
In the nearer term, earnings visibility is supported by a sizeable order book within the EPCC segment.
As of Dec 31, 2025, the expanded EPCC segment’s order book stood at RM138.1mil, which is expected to be recognised across 2026-2027, providing near-term earnings visibility for the group, TA Research noted.
Beyond the confirmed backlog, the company continues to pursue new opportunities across several segments. Within O&G, it has a tender book valued at RM120mil, covering six projects and two call-out contracts.
Its civil, mechanical and maintenance segment also holds RM30mil worth of jobs with seven projects shortlisted, while bids for RM18mil in utilities projects from Tenaga Nasional Bhd further bolster its pipeline. Meanwhile, diversification into data centre infrastructure could provide an additional growth avenue.
“The group has secured a mechanical and electrical works contract for a data centre project in Johor, valued at approximately RM35mil, with completion expected by July 2026,” TA Research said, adding that Steel Hawk is also bidding for two more similar contracts.
Steel Hawk’s net profit rose to RM13.7mil in 2025 from RM12.7mil in 2024, as revenue rose to RM122.3mil last year from RM78.4mil in the preceding year.
