Research Firms Issue ‘Buy’ Calls On Econpile Following Penang LRT Contract Win
KUALA LUMPUR, June 6 (Bernama) -- RHB Research has maintained its ‘Buy’ recommendations on Econpile Holdings Bhd following the company’s contract win for the Penang Light Rail Transit (LRT) project.
The RM42.8 million contract awarded by Irama Duta Sdn Bhd involves bored piling and related works from East Jelutong to Gelugor of the Penang Mutiara Line (PML), with work scheduled to begin on Aug 1, 2025, and targeted for completion by October 2027.
In a research note today, RHB Research said it maintains its target price of RM0.42.
“We understand that prior to this job win, Econpile was already involved in some test piling works for Penang LRT Segment 1, and with the East Jelutong to Gelugor stretch spanning about 5km of the estimated 24km segment, this could imply a total of five piling packages.
“Hence, we do not discount the possibility of more piling awards taking place in the future,” the firm said.
RHB Research also said Econpile has already met its full-year job win target of RM300 million for the financial year 2025 (FY2025), with its outstanding order book now estimated at RM480 million.
“This includes piling works for condominiums, a bridge, and mixed development commercial buildings, in addition to the latest job win, with the group’s tender book standing at around RM1 billion, comprising both private and public sector jobs.
“Potential re-rating catalysts include faster-than-expected approval for the Sungai Klang Link project (RM300 million-RM500 million for piling works), while the gross profit margin for the latest job is expected to come in at 5 per cent to 8 per cent,” it said.
RHB Research added that it remains positive on Econpile’s track record in infrastructure projects compared to other piling contractors, supported by its undemanding valuation, with the stock’s FY2026 forecast price-to-book value of 1.2 times standing 0.5 standard deviations below its 10-year mean.
Meanwhile, CIMB Securities also issued a ‘Buy’ call with an unchanged target price of RM0.38.
“We are positive on Econpile’s new contract win which is worth RM43 million,” it said.
CIMB Securities also said that having secured the first major piling contract under the PML, Econpile is well placed to bid for a larger piling-related job expected under Package CMC1.
“Inclusive of this upcoming bid, we expect tenders for substructure works to gather momentum in the months ahead, as full-scale construction works under the PML are set to begin in the fourth quarter of 2026,” CIMB Securities said.
On the downside, both firms cautioned that slower-than-expected rollout of infrastructure projects and volatility in material prices remain key risks.
At 10.54 am, Econpile’s shares were up half a sen at 29 sen, with 1.62 million shares traded on Bursa Malaysia.