HE Group Experiencing A Solid Quarter

HE Group Berhad (HE Group) recorded a 2QFY26 core net profit of RM5.1m, up 60.8% YoY, driven by higher project progress recognition from ongoing contracts and the commencement of new projects.

Although 1HFY26 results came in below expectations at 40% and 41% of our and consensus full-year forecasts respectively, we expect a stronger 2HFY26 as project milestones are reached and revenue recognition accelerates.

“Accordingly, we keep FY26F earnings estimate unchanged but raise our FY27-28F forecasts by an average of 28%, reflecting a healthy tenderbook pipeline,” says PIB.

HE Group

However, tenderbook conversion remains the key variable to watch, as further contract wins will be necessary to sustain the current earnings trajectory.

“In view of its track record in securing more data centre-related jobs, we now value HE Group based on a higher PE multiple of 15x FY27F EPS (14x previously) to derive our revised TP of RM0.91. Maintain Neutral given the limited upside to our new TP.”

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