PETALING JAYA: Southern Score Builders Bhd
’s (SSBB) latest contract to undertake electrical works for data centre (DC) projects reinforces the group’s strong presence in the fast-growing DC sector, according to Phillip Capital Research.
SSBB announced that its 51%-owned subsidiary, SJEE Engineering Sdn Bhd, has secured two letters of award from a local construction company to undertake an electrical subcontract works for a DC project (worth RM150mil) and another additional electrical works for an existing subcontract project (at RM39mil).
The research firm said including this latest win, the company’s year-to-date contract wins have reached circa RM425mil, representing 39% of Phillip Capital’s financial year 2026 (FY26) replenishment assumption of RM1.1bil.
“This lifts SSBB’s outstanding order book to RM1.6bil, with DC projects accounting for 27% of the total. Assuming a 15% net profit margin, we estimate the two projects will contribute RM28.4mil over the contract period. This repeat order from an existing client demonstrates the group’s execution track record and client confidence, serving as a strong testament to its reliability and strengthening its positioning for future project wins,” the research firm said in a report.
The scope of work includes supply, installation, testing and commissioning, as well as maintenance and warranty, with a total contract value of RM189mil.
The new contract commenced in March 2026 and is scheduled for completion by November 2026, while the existing project, which was awarded in August 2024, is expected to be completed by October 2026.
Overall, Phillip Capital said replenishment prospects remain healthy, supported by a diversified RM1.4mil tender book, comprising DC (24%), residential (38%) and government-related buildings (38%).
However, it keeps the company’s earnings forecast unchanged as this contract falls within replenishment assumption.
“We reiterate our ‘buy’ rating and target price at RM0.75, pegged to a target 18 times price-to-earnings multiple on FY27 estimated earnings per share.
“We continue to favour SSBB for its strategic expansion into the fast growing DC sector, coupled with robust order book visibility from existing anchor clients.”
Meanwhile, Apex Research also kept its “buy” call on the stock with a slightly higher target price of RM0.81.
Assuming a profit after tax margin of 18%, it said the contract is expected to contribute around RM17.4mil (or 23% of FY26 earnings) over the FY26-FY27 period.
