UUE Holdings’ Margins Hit by Cost Overruns, Outlook Remains Positive

UUE Holdings (UUE MK) reported 3QFY26 core PATAMI of RM6.4m, up 3.9% quarter-on-quarter, supported by stronger contributions from its underground utilities engineering segment in Singapore. However, year-on-year performance slipped 11.7% as cost overruns weighed on margins despite a 30.3% increase in segmental revenue. For the nine months, core PATAMI stood at RM14.2m, achieving just over half of both house and consensus full-year estimates.

UUE Holdings

Reflecting margin pressure and seasonally softer revenue expected in 4QFY26, earnings forecasts for FY26F were cut by 29.7%. Still, analysts maintain FY27F-FY28F projections, viewing the overruns as project-specific rather than structural, with activity expected to ramp up from 1QFY27. UUE’s orderbook remains robust at RM508.5m, providing earnings visibility for three years, underpinned by Tenaga Nasional’s higher capital expenditure under Regulatory Period 4. The stock retains an Outperform rating with unchanged target price of RM0.73, pegged to 18.0x CY26F EPS of 4.1 sen. – Source: Public Investment Bank

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Staff Writer

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