Econpile set to surge despite slower project rollout, says RHB IB after cutting targets

KUALA LUMPUR (Feb 20): RHB Investment Bank (RHB IB), which cut Econpile Bhd’s (KL:ECONBHD) earnings forecasts and target price, still expects its share price to almost double to 44 sen over the next 12 months. The stock was trading at 22.5 sen earlier.

The research firm has trimmed Econpile's earnings forecasts for the financial year ending June 30, 2026 (FY2026)-FY2028 by 2%-5%, reflecting a lower assumption for new job replenishments of RM450 million, down from RM600 million. It has also cut the target price-to-book multiple to 1.8 times from 2.1 times, reflecting potential delays in key projects such as the Sungai Klang Link project. This brings the new target price to 44 sen.

It maintained its "buy" rating on the stock however, citing a strengthening earnings recovery, a rising order book, and strong positioning in infrastructure projects, even as it adopts a more conservative view on project timelines.

RHB IB expects Econpile’s second quarter of FY2026 (2QFY2026) core net profit to come in between RM2 million and RM3 million, up from RM1.9 million a year earlier, supported by higher progress billings from its expanding order book.

Econpile’s outstanding order book has risen to an estimated RM700 million, the highest since 2QFY2022, following RM337 million in new job wins so far this financial year—close to its FY2026 internal target of RM400 million and already comparable to FY2025’s full-year total of RM390 million.

RHB IB highlighted Econpile’s strong track record in railway- and highway-related infrastructure projects, including several assignments awarded by Ahmad Zaki Resources Bhd (KL:AZRB). It said this puts it in the running for Ahmad Zaki’s recent RM430 million contract win to construct a new bypass and upgrade federal roads in Cameron Highlands, Pahang.

Despite near-term uncertainties and a more cautious rollout timeline, RHB IB views Econpile’s valuation as undemanding, trading below its long-term historical average, underpinning the research firm’s positive stance on the stock.

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