KUALA LUMPUR: Kee Ming Group Bhd exceeded expectations in its 2026 financial year (FY26), on the back of stronger-than-expected margins from additional variation orders (VO) and project finalisation cost savings, said Maybank Investment Bank (Maybank IB) in a results note.
However, the research firm is only making a minor 1% "housekeeping" adjustment to its FY27-28 earnings forecast as it expects net profit margins to normalise to 10-11%, from 13-14%.
"We anticipate a shift in project mix towards high-voltage (HV) solar interconnection facility (IF) and data centre mechanical and electrical projects, which typically carry marginally lower margins than industrial factory projects but offer higher contract values," it said.
Maybank IB rolled forward its valuation base to CY27E (from FY27), raising its target price to RM1.36 from RM1.17 based on an unchanged 15x forward price-earnings ratio.
Maybank IB said - after stripping out the listing expenses and impairment on financial assets - Kee Ming's core earnings of RM22mil represented a 167% year-on-year (y-o-y) increase, accounting for 128% of Maybank IB's FY26 forecasts.
Annual revenue, meanwhile, jumped 143% y-o-y on a stronger orderbook and a strategic shift towards fast-turnaround DC, industrial, and HV solar IF projects.
Sequentially, 4QFY26 core earnings were up 41% over the preceding quarter (q-o-q) to RM9mil despite a 28% q-o-q decline in revenue to RM41.9mil. This was attributed to finalisation of cost savings from the completion of its Valdor industrial park, which lifted gross profit margin higher to 34.9%.
