PETALING JAYA: CBH Engineering Bhd is poised for stronger earnings momentum in the second half of financial year 2026 (2H26), underpinned by accelerated execution of its data centre (DC) order book and a growing tender pipeline, according to Phillip Capital Research.
The research house expects CBH’s revenue for 2H26 to reach RM310mil to RM360mil, supported by the execution of its RM890mil outstanding order book.
Management expects to recognise 35% to 40% of the order book in the second half, implying full-year revenue of RM520mil to RM570mil.
Phillip Capital Research is forecasting third quarter of financial year 2026 (3Q26) core net profit of RM26mil to RM30mil, compared with RM25mil in the second quarter and RM6mil a year earlier.
The stronger earnings outlook comes as CBH’s contract wins accelerate.
Its year-to-date wins stood at RM477mil, equivalent to 68% of Phillip Capital Research’s replenishment assumption and bringing its latest order book to RM890mil.
The research house noted that award momentum had accelerated meaningfully over the past two months, after CBH secured only RM60mil of wins in the first seven months of 2026.
It believes the company remains on track to meet, and potentially exceed, management’s RM600mil internal contract-win target for the year.
CBH’s RM1bil tender book also provides visibility for future order replenishment, with 80% comprising DC projects, including eight projects currently under bid.
Based on the company’s historical 30% to 40% tender win rate, Phillip Capital Research estimates the pipeline could generate RM300mil to RM400mil of additional contract wins, supporting order book replenishment into 2027 and 2028.
Phillip Capital Research raised its 2026 to 2028 earnings forecasts by 21%, citing better-than-expected project margins.
CBH recorded a 20% net profit margin in 1H26, above the research house’s previous 14% assumption, prompting it to raise its forecast to 17%.
The stronger margins were attributed to a favourable project mix, with DC substation works accounting for 90% of the order book, as well as operating leverage.
For 3Q26, however, the research house expects margins to normalise to about 17% as the project mix changes and newer contracts enter execution.
Management continues to guide for 12% to 15% net margins on a per-project basis.
Phillip Capital Research maintained its “buy” call and raised its 12-month target price to RM1.35 from RM1.11, citing CBH’s exposure to Malaysia’s power infrastructure upcycle and its track record with hyperscalers.
