Southern Score's maiden entry into data-centre space a positive for firm
SSBB's 51%-owned subsidiary, SJEE Engineering Sdn Bhd, has secured a subcontract to supply, install, test and commission electrical, telco and security underground infra works, worth a contract value of RM19.3mil from Sunway Construction Sdn Bhd (SunCon).
Phillip Capital Research stated the contract win not only provided SSBB with initial exposure to a new DC end-client, but also strengthened its prospects of securing additional work from the client's ongoing DC projects.
This is particularly DC-based mechanical and electrical fit out packages, worth an estimated RM100mil to RM200mil.
'This contract marks SSBB's maiden win in financial year 2026 (FY26), lifting its outstanding order book to RM1.3bil, translating to 7.8 times FY24 revenue cover.
'Assuming a 10% profit after tax (Pat) margin for DC-related projects, we estimate this project to contribute RM2mil Pat in FY26, representing 3% of our FY26 forecast,' the research house stated in a report on the construction management services company.
The project is scheduled to commence in July and be completed by December this year, although SunCon reserves the right to defer the timeline by up to six months at its discretion.
The research house added SSBB's order-book replenishment prospect remained well supported by a RM1.2bil tender pipeline, comprising DC (39%), residential (30%) and government-related building (30%) projects.
Due to its robust order book and strategic expansion into the DC space, Phillip Capital Research has maintained its 'buy' rating and target price of 75 sen a share for SSBB.
The valuation is pegged to a target 18 times price earnings multiple on the FY27 earnings per share of 4.2 sen.
For the third quarter ended March 31, 2025, SSBB's net profit rose to RM10mil from RM7.19mil in the previous corresponding period, while revenue grew to RM59.84mil from RM39.35mil a year earlier.
In a filing on its third-quarter financial performance, the company said it is continuously strengthening its position within the construction value chain, ultimately creating greater value for its stakeholders.
'As part of this commitment, the group has successfully expanded its capabilities to include mechanical and electrical (M&E) services through the strategic acquisition of SJEE, an M&E company specialist in the high-tech, DC and healthcare sectors.'
Additionally, the group said it had established Southern Score Digital Sdn Bhd – a digital arm focusing on digital engineering advisory, construction advisory and building information modelling services.
'With the integration of these services into the group, the board is confident that the group will be able to secure more contracts to enhance existing order book and chart a path towards greater heights and long-term sustainable success,' it said.
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