New Job Order Can Dig Econpile Out Of Weak Earnings
CIMB Investment Bank Bhd (CIMB Securities) has maintained its BUY call on Econpile Holdings Bhd with an unchanged target price of RM0.38, citing the group’s improving earnings trajectory and revitalised job flows as key drivers. The research house noted that despite Econpile reporting a marginal net loss of under RM0.1 million for 3QFY6/25 due to a 12.7% quarter-on-quarter drop in revenue, its nine-month core profit of RM2.3 million marked a significant turnaround from a RM15.7 million core loss a year earlier.
The house viewed the 9MFY6/25 results as within expectations, given that construction activities typically slow during festive periods and are expected to pick up in the final quarter of the financial year. Despite the earnings only making up 50% of its full-year forecast and 22% of consensus estimates, CIMB Securities highlighted improved core EBITDA margins at 6% versus -1.4% in the previous year, attributed to better cost controls and the completion of legacy projects.
Job wins continue to gather pace, with Econpile securing new bridge works in Pahang from Ahmad Zaki Resources. This brings the group’s year-to-date FY25 order book wins to RM289 million, placing it on track to meet its RM400 million target for the year. The company is also actively bidding for RM1 billion worth of contracts, including major infrastructure works such as the Penang LRT project, for which it has already secured a test piling job estimated to be worth over RM5 million.
CIMB Securities expects the intensifying tender activity in large-scale infrastructure to present more opportunities for Econpile to offer its specialist piling services at higher margins. Other potential catalysts include a RM50–100 million industrial building job and developments tied to the proposed Sg. Klang Link highway.
With a net gearing ratio of 18.2% as of 31 March 2025 and the stock trading at a price-to-book value of 1.2 times—below its historical mean of 1.4 times—the house reiterated its confidence in the group’s recovery path. It projected core net profits to rebound to RM4.7 million in FY25F before strengthening to RM31.3 million in FY27F, supported by a robust pipeline and improved sector dynamics.
The key re-rating catalysts, according to CIMB Securities, include higher infrastructure spending and a recovery in property launches, while delays in large project rollouts remain the main downside risk.
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