Southern Cable Secures RM403.6m TNB Extension, Strengthening FY27 Earnings Visibility

Southern Cable secured a RM403.6 million TNB contract extension, lifting its order book above RM1 billion, reinforcing earnings visibility through FY27 while supporting long-term growth prospects.

Southern Cable Secures Extension

Southern Cable Group Berhad (SCGBHD) has secured a RM403.6 million supplementary contract from Tenaga Nasional Berhad (TNB), strengthening its order book and reinforcing earnings visibility through FY2027.

The contract, awarded to wholly owned subsidiary Southern Cable Sdn Bhd on July 2, 2026, represents TNB’s exercise of a one-year extension option under the original supply agreement signed in February 2025. The extension covers the supply of underground power cables and conductors for TNB’s Distribution Network Division from August 2026 to August 2027.

With the latest award, Southern Cable’s outstanding order book has exceeded RM1 billion, while cumulative contracts secured from TNB since 2025 have surpassed RM900 million.

MBSB Research maintained its BUY recommendation on the company with an unchanged target price of RM2.97, based on a 20-times price-to-earnings multiple applied to its FY2027 forecast earnings per share of 14.9 sen.

The research house viewed the contract positively, saying it provides an additional revenue stream over the next year while strengthening the group’s long-term earnings visibility. It also follows the RM121.1 million variation order awarded in February 2026, bringing the cumulative value of the framework agreement to approximately RM928 million.

MBSB Research believes the extension reflects resilient demand driven by TNB’s RP4 grid expansion programme, transmission upgrades and increasing demand for medium-voltage cables. It also highlighted growing opportunities from Malaysia’s expanding data centre industry, where the Green Lane initiative is accelerating grid connections and cable procurement.

Despite the sizeable contract, MBSB Research left its FY2026 and FY2027 earnings forecasts unchanged at RM163.1 million and RM194.0 million, respectively, noting the extension had already been factored into existing order book assumptions.

The research house added that Southern Cable remains well positioned for long-term growth, supported by planned capacity expansion, improving vertical integration, infrastructure spending and expanding export opportunities, particularly in the United States.