PETALING JAYA: Engineering and project management consultancy HSS Engineers Bhd
will see an improvement in the company’s cashflow situation, which turned slightly negative in the first quarter ended March 31, 2026 (1Q26), as the first milestone payment of US$750,000 from the Baghdad Metro project may be received in the next two weeks.
CGS International (CGSI) Research said the company received a letter of credit on July 8 from the Trade Bank of Iraq that paves the way for the first milestone payment of US$750,000 within the next two weeks, with the full 10% of US$5.2mil representing its 50% share as project management consultant (PMC), to be received by the end of 3Q26.
The project started in 2024, in which the US$52.5mil PMC phase has been half completed and 21% recognised in the company’s profit and loss as at 1Q26.
It said the first milestone payment and the conclusion of Iraqi elections may also result in the company resuming work on the project that may provide upside to the forecast.
CGSI Research has reiterated an “add” call with a target price 81 sen in view of the company’s capital expenditure-light business model and its positioning at the front of the construction value chain.
HSS has secured half of its RM300mil project replenishment target for the financial year ending Dec 31, 2026, as of July.
It said the company has seen progress in higher probability projects such as Johor elevated autonomous rapid transit, Ulu Padas water, interstate water transfer from Perak to Penang and the first phase of Westports topside development.
