PETALING JAYA: UUE Holdings Bhd
could post another record performance in the coming quarter, driven by Malaysian contracts reaching revenue recognition, says Hong Leong Investment Bank (HLIB) Research.
In addition, the research house said it believes the group is entering an “earnings inflection point” in the financial year 2027 (FY27), with Singapore increasingly becoming the key growth driver.
Following the group’s record earnings in its financial results for the second quarter ended Aug 31, 2026 (2Q27), it has raised its FY27, FY28 and FY29 earnings estimates for UUE by 13%, 8% and 9%, respectively, to reflect higher margin assumptions.
“We view UUE as an up-and-coming underground utilities engineering specialist well positioned to gain market share, particularly as major mechanical and electrical contractors typically outsource these specialised works while focusing on higher-value substation packages,” HLIB Research said.
The research house noted that the market has not fully priced in the potential from Singapore’s recently announced S$5.3bil power grid investment plan, which represents an 11-fold increase from the preceding period.
“Plans to build seven new substations and expand the transmission network by 18% should bode well for UUE, given its established track record with key players such as SP Power and EGP Energy,” it said.
Meanwhile, HLIB Research said demand in Malaysia shows encouraging potential, with rising project opportunities from Tenaga Nasional Bhd, data centres and solar developments.
Additionally, it said it considers the group’s recent joint venture with EGP Energy for substation works a “key upside catalyst”, adding that a maiden contract win could shift market perceptions of its earnings and growth prospects.
In 2Q27, the group recorded a core profit after tax of RM11.2mil, up by 76% year-on-year (y-o-y), bringing the total for the first half of FY27 to RM20.4mil, which marks a 147% y-o-y increase.
The result came above the research house’s as well as consensus expectations at 55% of full-year forecasts, HLIB Research said. It noted that the earnings beat was mainly from stronger-than-expected margins, driven by faster-than-anticipated ramp-up in the UUE’s Singapore and Malaysia operations.
Group revenue grew 30% y-o-y on the back of 296% higher contributions from Singapore and 4.1% from Malaysia. HLIB Research has maintained its “buy” call on the stock with a higher target price of RM1.08, from RM1 previously.
