PETALING JAYA: The conservative dividend per share of 0.4 to 0.6 sen over 2026 to 2028 for CBH Engineering Holding Bhd has been forecasted and this translates to a payout ratio of 10% and dividend yield of 0.8% to 1.2%.
CBH does not have a formal dividend policy, reflecting its priority on growth.
But the group declared a dividend per share of 0.27 sen in 2025, implying a payout ratio of 11%, said Phillip Capital Research.
Additionally, Phillip Capital Research projects CBH’s core earnings to grow by 81% year-on-year (y-o-y) in 2026 before moderating to 20% to 21% y-o-y in 2027 to 2028, implying an earnings compounded annual growth rate of 38%.
CBH has historically delivered a profit after tax margin of 12% to 16% prior to 2025, outperforming its industry peers.
CBH’s net profit margin increased from 11% in 2022 to 20% in 2025.
The research house initiated coverage on the stock with a “buy” call rating and target price of 91 sen per share, based on a price-to-earnings ratio of 18-times on a 2027 earnings per share estimate.
At 12-times a 2026 price-to-earnings ratio, Phillip Capital Research sees substantial re-rating potential as earnings growth accelerates alongside supportive long-term industry tailwinds.
CBH is a mechanical and electrical engineering specialist focusing on power distribution infrastructure.
CBH’s outstanding order book stood at RM592mil as at February 2025, with 90% derived from data centre (DC) substation projects, reflecting the group’s deepening exposure to Malaysia’s rapidly expanding DC ecosystem.
Management expects about 90% of its order book to be recognised in 2026, providing strong near-term earnings visibility.
The group’s latest tender book currently stands at RM830mil, with a targeted win rate of 20%.
Phillip Capital Research assumes order book replenishment of RM700mil, RM750mil and RM800mil from 2026 to 2028, respectively.
In terms of execution capacity, CBH is able to undertake up to RM800mil worth of projects with its existing workforce of around 80 employees, said Phillip Capital Research.
CBH has maintained a net cash position since its listing in 2025.
As of the end of 2025, the group has a net cash of RM150mil, with minimal total borrowings of RM3mil.
However, the key risks cited include its revenue depending on replenishing its order book.
About 90% of its tender book is linked to the DC segment.
The group is also reliant on subcontractors and it faces stiff competition from both local and foreign players.
Phillip Capital Research said it likes CBH for its compelling growth prospects as a direct proxy to Malaysia’s accelerating power infrastructure investment cycle.
This is supported by its proven track record in executing hyperscaler projects, its above-industry margin profile and its asset-light business model that delivers superior return on equity.
