Pekat Group Berhad, through its 60%-owned indirect subsidiary EPE Switchgear (M) Sdn Bhd, has secured a RM113.3 million two-year contract from Tenaga Nasional Berhad (TNB) for the supply of 11kV motorised Ring Main Units and Remote Control Boxes. The win elevates Pekat’s outstanding order book to RM745.3 million, equivalent to 2.6 times its FY24 revenue.
The positive outlook is underpinned by TNB’s Regulatory Period 4 (RP4) capex plan, which prioritises distribution upgrades, grid automation, and connectivity—segments where EPE holds a strong position. No changes to earnings forecasts, as the contract was already factored into FY26 assumptions. Analysts have upgraded the stock to BUY, raising the target price to RM1.87 (from RM1.68) based on sum-of-parts valuation, supported by a three-star ESG rating.
Pekat Group Berhad has clinched a significant RM113.3 million two-year contract from Tenaga Nasional Berhad (TNB) through its 60%-owned indirect subsidiary, EPE Switchgear (M) Sdn Bhd.
The contract involves supplying 11kV motorised Ring Main Units (RMUs) with interconnectors and Remote Control Boxes (RCBs). This latest win elevates Pekat’s outstanding order book to RM745.3 million, representing 2.6 times its FY24 revenue and providing robust earnings visibility through FY27.
Apex Research views this development positively, estimating the contract could generate approximately RM27 million in gross profit (at 25% GP margin) over its duration, with roughly RM13.5 million each recognised in FY26 and FY27. The firm highlights EPE’s strong positioning under TNB’s Regulatory Period 4 (RP4) capex plan of up to RM42.8 billion, where over half is earmarked for distribution upgrades, grid automation, and connectivity—areas requiring extensive RMU and RCB deployment. As one of few qualified vendors with a long-standing relationship with TNB, EPE is well-placed for repeat orders.
No changes were made to FY26 earnings forecasts, as the win aligns with prior RM250 million order-book replenishment assumptions. Apex Research introduced an FY27 earnings forecast of RM64.5 million. Valuation was enhanced by raising the P/E multiple for EPE Switchgear to 17x from 15x, leading to a higher target price of RM1.87 (previously RM1.68) based on sum-of-parts methodology, backed by a three-star ESG rating.
Apex Research upgraded Pekat to BUY from HOLD, citing its synergistic business model, strong margins in power distribution, and potential Main Market transfer. Risks include reliance on government initiatives, contract wins, and raw material cost spikes.
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