PETALING JAYA: Econpile Holdings Bhd
’s first contract win for its financial year ending June 30, 2027 (FY27) has strengthened confidence that the piling specialist can match last year’s order book replenishment.
CGS International (CGSI) Research said Econpile recently secured a RM39.5mil contract from WCT Holdings Bhd to undertake earthworks, bored piling and sub-structure works for the W City OUG commercial development in Kuala Lumpur.
The development comprises four five-storey commercial shop blocks with 68 units, two sub-basement car park levels, a commercial unit, a main switch station and a refuse chamber.
The research house said the latest award lifted Econpile’s outstanding order book to RM664mil as at July 2026. It reiterated its “add” call and 24 sen target price.
“This is Econpile’s first win for FY27 and, in our view, the group should be able to match its FY26 contract wins of RM405mil.”
Additionally, it expects the project to generate a gross profit margin of about 10%, in line with the group’s previous lump-sum contracts. The research house said a more stable operating environment should allow Econpile to exercise better cost control and preserve margins despite lingering industry cost pressures.
It also noted that Econpile has continued to see healthy tender activity despite fluctuations in construction costs.
“As at end-March 2026, its balance sheet remains strong with a small net debt of RM1.7mil and robust operating cash flows, enabling the company to weather the current challenging environment better than its peers,” it said.
CGSI Research’s target price of 24 sen is based on 24 times the calendar year 2027 forecast earnings.
It believes the stock is deeply undervalued, trading at all-time lows and at only 0.5 times forecast FY26 price-to-book value.
Furthermore, the research house expects a re-rating if cost pressures continue to ease and the company secures additional contract wins.
Potential catalysts include the signing of a memorandum of understanding for the Sungai Klang Link project and the rollout of major infrastructure projects.
“Key risks include delays in the implementation of mega projects, which could affect job replenishment, as well as another spike in raw material costs,” it noted.
