PETALING JAYA: ISF Group Bhd’s recent contract win is expected to contribute RM1.9mil, RM1.6mil and RM1.1mil in profit before tax for financial year 2026 (FY26), FY27 and FY28, respectively.
That is based on Apex Securities Research’s assumption of a 20% profit before tax margin for residential projects and 25% for data centre projects.
It believes the execution risk is expected to remain manageable, supported by the group’s proven track record in delivering similar projects. ISF secured four sub-contracting works worth a total of RM22.5mil for cold water and sanitary plumbing services across several service apartments and one data centre.
ISF is a specialised plumbing contractor and piping solutions provider.
Looking ahead, ISF’s earnings outlook remains resilient, supported by a healthy order book of RM148mil, which translates into a robust revenue coverage of 1.2 times FY26 revenue and provides strong earnings visibility, it said. Based on an estimated burn rate of RM10.2mil per month, the group has secured RM58mil in new contract awards year-to-date.
Backed by an assumed outstanding tender pipeline of RM350mil, ISF remains on track to achieve its full-year new contract win target of RM150mil.
It expects a win rate of 30% and believes the group is well-positioned to capitalise on sustained data centre investments in the Klang Valley and Johor.
However, it is mindful of macroeconomic headwinds, particularly rising input costs for high-density polyethylene pipes and diesel.
In light of the increase in raw material costs, Apex Securities revised its core net profit forecasts downward by 7.7% and 7.6% for FY26 and FY27, respectively.
The research outfit has maintained its “buy” recommendation on the counter with an increased target price of 62 sen from 55 sen a share.
