PETALING JAYA: Southern Score Builders Bhd
(SSBB) will likely enjoy strong project replenishment momentum, driven primarily by its expanding footprint in the high-growth data centre (DC) sector in the country.
SSBB’s 51%-owned subsidiary, SJEE Engineering Sdn Bhd, latest DC related contract win is a RM40mil electrical sub-contract for a DC project in Nilai, Negri Sembilan.
This contract takes SSBB’s year-to-date contract wins for financial year 2027 (FY27) ending June 30, to RM471.5mil, tracking close to full-year replenishment assumptions of various brokerages less than three months into the company’s financial year.
The award marks SJEE’s sixth DC contract win in 2026, raising cumulative DC contract wins for the year to RM528mil and solidifying SSBB’s positioning as a premier mechanical and electrical (M&E) specialist.
“This contract lifts its outstanding order book to RM1.9bil (SJEE makes up 33% of the total), providing earnings visibility until FY29.
“Assuming a 15% net profit margin for this award, we estimate an RM3mil net profit contribution over contract duration.
“Given the sizeable scale of this DC development, we believe SJEE stands a good chance of securing further packages from the same site as subsequent works are awarded.
“Replenishment prospects remain well supported by a sizeable RM1.1bil tender book, comprising high-rise residential and hospital (44%), DC (52%) and specialised engineering consultancy solutions (4%) projects,” Phillip Capital Research stated in its latest report on SSBB.
The order book offers solid revenue and earnings visibility equivalent to a 3.9-times book-to-bill ratio against SSBB’s FY26 revenue, securing top-line prospects through FY29.
Because M&E DC works feature short construction cycles of under two years, they facilitate faster revenue and profit recognition for SSBB.
Meanwhile, SSBB’s construction division’s contract replenishment is more periodic but offers higher value contracts such as hospitals and high-rise developments.
SSBB’s active tender pipeline of RM1.1bil is across DC, healthcare and semiconductor opportunities, alongside strong ongoing relationships with anchor property clients such as Platinum Victory Holdings Sdn Bhd and Radium Development Bhd.
Unsurprisingly, brokers maintain a bullish outlook on SSBB with “buy” calls across the board
Despite the latest DC contract win, Apex Securities Research kept its target price (TP) for SSBB at 78 sen a share, with the valuation pegged to an unchanged 17.6-times price earnings (P/E) multiple applied to FY27 earnings per share (EPS) of 4.4 sen, citing rapid order book replenishment and low execution risk.
Phillip Capital Research has a TP of 74 sen on the stock, with the valuation is based on an 18-times P/E multiple on FY27 EPS of 4.1 sen, driven by an expected 49% EPS growth in FY27 as SJEE ramps up data centre execution.
TA Research also maintained its “buy” call on SSBB with a TP of 70 sen a share.
The TP is derived from a 15-times P/E multiple applied to 2027 EPS, highlighting the group’s net cash position, double-digit profit margins and strategic exposure to Malaysia’s DC boom.
