PETALING JAYA: Econpile Holdings Bhd
is expected to strengthen its contract replenishment momentum and improve earnings visibility following its latest RM73mil construction contract for a new hospital development in Kuala Lumpur.
The award will add to the piling and foundation specialist’s order book, while supporting its efforts to meet its RM450mil contract win target for the financial year ending June 30, 2027 (FY27).
According to CGS International (CGSI) Research, the latest contract brings Econpile’s year-to-date contract wins for FY27 to approximately RM165mil and its outstanding order book to RM630mil as at November 2026.
The research house said the project’s gross profit margin was guided at between 9% and 10%, despite the more complex nature of the works, as the tender was highly competitive.
“In our view, a more stable cost environment should enable Econpile to exercise better cost control and sustain its margins,” it said.
The RM73mil contract was awarded by SA Architects Sdn Bhd on behalf of Hospital Tung Shin.
The scope covers earth-retaining structures, piling and pile cap works, as well as the construction of the lowest basement slab for the proposed new hospital building.
Work commenced on Nov 1 and is expected to be completed within 21 months.
CGSI Research noted that Econpile had secured another RM24.4mil contract in October for the construction of a 53-storey serviced apartment block comprising 315 units in Kuala Lumpur.
The company has set a FY27 contract win target of RM450mil, compared with RM405mil achieved in FY26, alongside a gross profit margin target of 9% to 10%.
Meanwhile, BIMB Research estimated that including the latest Hospital Tung Shin award, Econpile’s cumulative FY27 contract wins stood at approximately RM158.5mil, equivalent to about 35% of management’s replenishment target.
Its estimate comprises RM61.1mil in previously disclosed wins, the RM24.4mil Jalan Tun Razak contract awarded on Oct 26, and the latest RM73mil award.
“We view the pace of replenishment positively, particularly against management’s active tender book of approximately RM1.5bil, which provides reasonable visibility for further contract conversion,” it said.
On its financial position, CGSI Research said collections from ongoing projects remained healthy, while outstanding receivables from legacy projects were being progressively addressed.
It believes this puts the group in a better position than its peers to navigate the prevailing high-cost environment.
CGSI Research reiterated its “add” call on Econpile with an unchanged target price of 24 sen, based on 24 times 2027 forecast price-to-earnings ratio.
Similarly, BIMB Research maintained its “buy” recommendation with an unchanged target price of 16 sen, based on 0.6 times FY27 book value per share of 25.6 sen, citing improving contract replenishment momentum, a strengthening project mix and a lowly geared balance sheet.
It said the latest contract further strengthens the group’s exposure to the healthcare and institutional segments, complementing its established residential and commercial piling activities.
However, the research house maintained its profit forecasts, as the latest contract award remains broadly in line with its contract replenishment assumptions.
