PETALING JAYA: KJTS Group Bhd
is expected to sustain strong earnings momentum into the third quarter of its financial year ending Dec 31, 2026 (3Q26), driven by higher contributions from its cooling energy (CE) business and supported by integrated facilities management services.
In a report, CIMB Research said the group’s RM560mil order book as at June 30, 2026, which extends through 2046, would provide strong earnings visibility.
It noted that that only about 6% to 7% of the order book comprises engineering, procurement, construction and commissioning (EPCC) projects, with the remainder largely made up of recurring contracts.
“Recurring revenue, which accounted for 32.2% of 2Q26 revenue, should rise progressively as completed EPCC projects turn into longer-term operation and maintenance, shared savings, and chilled water supply contracts.”
The research house said EPCC revenue too should remain healthy in the second half of financial year 2026, underpinned by smaller contracts secured since end-June 2026 that were below Bursa Malaysia’s disclosure thresholds, while the group is targeting additional larger wins by the end of financial year 2026 (FY26).
Touching on KJTS’ contract pipeline, CIMB Research expects it to remain robust, supported by rising demand for CE solutions across multiple end markets.
“Importantly, demand is not reliant on any single industry, with KJTS already serving clients across manufacturing, hospitality, retail, and healthcare.
“This broad applicability reduces concentration risk and provides a wider runway for recurring energy efficiency contracts,” it added.
KJTS is also seeing increasing opportunities from the data centre (DC) segment, particularly for EPCC works involving CE infrastructure.
Given the compressed construction timelines of DCs, the research firm expects near-term opportunities to be predominantly EPCC-based, with recurring operations and maintenance and longer-term energy service contracts likely to follow once facilities become operational.
Meanwhile, KJTS’ subsidiary iHandal is pursuing a broader utilities-as-a-service proposition for clients with heating requirements, creating cross-selling opportunities and expanding the group’s addressable market beyond cooling energy.
CIMB Research maintained its FY26 to FY28 earnings forecasts ahead of KJTS’ 3Q results on Nov 25.
The research house reiterated a “buy” call and target price of RM1.35, based on 25 times 2027 forecast price-to-earnings.
