Kee Ming earnings set to jump on data centre, solar projects

KUALA LUMPUR: Kee Ming Group Bhd is expected to post stronger earnings of RM7 million to RM9 million in the second quarter of the financial year 2027 (Q2 FY27), up 16 to 40 per cent quarter-on-quarter (QoQ).

Maybank Investment Bank Bhd (Maybank IB) said the earnings growth would be driven by progress in its data centre electrical fit-out and solar interconnection facility (IF) projects.

The projected earnings of RM7 million to RM9 million would be higher than the RM6.4 million recorded in Q1 FY27.

The firm maintained its "Buy" call on the stock and raised its sum-of-the-parts-based target price to RM3.10 from RM2.42, based on an unchanged 20 times FY28 estimated price-to-earnings ratio.

It also raised its earnings forecasts on Kee Ming for FY27 to FY29 by 9.0 per cent to 22 per cent, reflecting improved profit margin assumptions and stronger prospects for new contract replenishment.

"Our margin assumption remains conservative versus Q1 FY27's, factoring in potential headcount cost increases as Kee Ming expands to support its growing project pipeline," it said.

Maybank IB said the company's tender book had grown 27 per cent QoQ to RM2.8 billion, supported by opportunities across industrial projects, data centres and high-voltage power infrastructure, including Tenaga Nasional Bhd-related and solar IF projects.

The firm anticipates solar IF projects linked to the Corporate Renewable Energy Supply Scheme to ramp up, with tenders expected to be called in the fourth quarter of calendar year 2027.

Maybank IB said this is expected to support higher contract replenishment in FY28 and FY29, backed by Kee Ming's synergies with Solarvest Bhd, which has historically secured about 30 per cent of the market share in utility-scale solar projects.

"We take this opportunity to raise our replenishment forecast from RM350 million to RM470 million across FY2-FY29, reflecting its stronger ongoing and future tender pipeline," it added.