Piping firm ISF Group to maintain focus on core piping works despite data centre-led earnings surge

Thursday 08 Oct 2026

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KUALA LUMPUR (Jan 28): Newly ACE-Market listed ISF Group Bhd (KL:ISF) said the company remains bullish on its core piping installation business across residential, commercial and institutional projects, even as rising data centre-related works have contributed meaningfully to earnings growth in recent years.

Managing director Jeff Ai Boon Chen said data centres are an important growth driver for the group, but stressed that the piping company is not a pure-play data centre contractor and retains the flexibility to pivot quickly to other segments should demand shift.

WATCH: NEWS: ISF stays focused on core piping works

"We are capitalising [on] the rise of the data centres, but if lets say data centres are no longer in play, we can quickly pivot to other segments like commercial, industrial, and residential, which is our core strength in our past few years' revenue," Ai told reporters after the company’s listing ceremony on Wednesday.

Data centre projects typically have shorter tender and award cycles and relatively low competitive intensity, with only three to four recurring competitors bidding alongside ISF, the company noted.

Its development projects typically require complex water and wastewater systems, including water storage tanks, rainwater harvesting systems and oil separators — areas that fall within ISF’s business operation.

ISF is primarily involved in the supply and installation of piping systems for end-user premises, as well as water supply and sewer infrastructure piping. It also provides maintenance and repair services for piping systems.

Johor's data centre, in particular, has emerged as the main revenue generator for ISF, thanks to the state's current status as the major data centre hub due to its proximity to Singapore and supportive initiatives such as the Johor-Singapore Special Economic Zone (JS-SEZ).

Riding on this, ISF said it plans to establish a new head office and storage facility in Johor, allocating RM10.25 million, or 16.8% of its IPO proceeds from the issuance of new shares, for the project. The facility is expected to commence operations in the third quarter of 2028.

The group is also expanding into turnkey data centre water systems, such as water treatment plants, which increase its addressable revenue per project beyond standard piping works.

ISF’s data centre-related revenue rose more than eleven-fold to RM11.7 million in the financial year ended Dec 31, 2024 (FY2024), from RM1.0 million in FY2022.

As at Sept 9, 2025, the group’s unbilled order book stood at RM120.7 million, providing revenue visibility through FY2028. Residential property projects accounted for the largest share at 56.9%, followed by commercial properties (17.8%), data centres (13.9%), industrial projects (9.1%) and other works (2.3%).

Meanwhile, ISF maintains a tender book of about RM460 million, with roughly 60% concentrated in higher-growth and higher-margin data centre and industrial segments. Historically, the group’s tender success rate has averaged around 40%, partly reflecting a higher proportion of smaller-sized contracts, the company noted.

The company was trading at 47.5 sen, up by 43.94% from its initial public offering (IPO) price of 33 sen, valuing the company at RM470 million.

Currently, Ai said the group primarily relies on in-house manpower to execute projects, engaging subcontractors only when required to meet tight completion timelines.

Earlier in the day, ISF’s shares surged 52% to 50 sen at the opening bell, exceeding most analysts’ fair value estimates, which range from 41 sen by RHB Bank to 47 sen by Tradeview Research, leaving only Apex Securities’ target price of 55 sen above the opening level.

At the latest price, ISF is valued at about 49.48 times earnings based on FY2024 net profit of RM9.64 million, on revenue of RM54.67 million. The company does not have a directly comparable listed peer on Bursa Malaysia with a similar breadth of piping-related contracting services.

The group does not have a formal dividend policy.

Alliance Islamic Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.

Edited ByPresenna Nambiar

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