PETALING JAYA: Pekat Group Bhd
’s medium-term earnings outlook is set to strengthen after the contract value of its Kulai large-scale solar project more than doubled, rising 118% and reinforcing its position in Malaysia’s utility-scale solar segment.
According to Apex Securities Research, the contract upgrade is expected to raise the group’s outstanding order book by more than RM100mil, reaching RM861mil as at financial year ended March 31, 2026 (FY26), from RM760mil previously, equivalent to a book-to-bill ratio of 1.4 times based on its (FY25) revenue.
“The contract expansion further reflects continued client confidence in the group’s project delivery capabilities, reinforcing Pekat’s position within Malaysia’s utility-scale solar segment.”
The turnkey engineering solutions provider recently announced that its indirect wholly-owned subsidiary, Pekat Solar Sdn Bhd, entered into supplemental agreements with the main contractor for its ongoing large-scale solar project in Kulai, Johor.
Following the variation works, the project’s capacity has been increased from 63 megawatts alternating current (MWac) to 135MWac.
The group’s additional works related to phase two of the existing project are expected to be completed within four months.
Consequently, the contract value was revised upward to RM186.5mil from RM85.7mil previously, Apex Research noted.
It said: “We believe the enlarged order book, coupled with continued opportunities across utility-scale solar, commercial and industrial solar, earthing and lightning protection (ELP) and EPE Switchgear segments, should continue to underpin earnings visibility and support future order book replenishment.
Assuming an 8% profit margin, the research house said the additional works could contribute RM8.1mil in project-level profit, equivalent to about 9% of Pekat’s financial year 2026 (FY26) profit forecast.
It added that Pekat’s execution risk remains manageable as the project is already underway, which reduces uncertainties typically associated with newly secured contracts.
Apex Research maintained its “buy” call on Pekat with an unchanged target price of RM1.88 a share, based on a sum-of-parts valuation comprising a 30-times FY27 forecast price-to-earnings ratio (PER) for its high-growth solar engineering, procurement, construction and commissioning segment, and a 15-times FY27 forecast PER for its ELP and trading segments.
“We make no changes to our earnings forecast as the award falls within our order book replenishment assumption of RM350mil for FY26.”
Pekat’s profit after tax and minority interests increased 3.1% to RM12.43mil in the first quarter ended March 31, 2026, from RM12.06mil a year ago.
