KUALA LUMPUR (Feb 13): Critical Holdings Bhd's (KL:CHB) recently secured RM35 million fast-track semiconductor cleanroom contract from a US-based multinational corporation is expected contribute 10% of earnings for the financial year ending June 30, 2026 (FY2026).
"This project is expected to command higher margins given its semiconductor focus and fast-track execution, with profit after tax margins estimated at about 10%, contributing about 10% of our FY2026 estimate," said Phillip Capital in a note on Friday.
Phillip Capital noted the project entails the design, construction, testing and commissioning of a new cleanroom production floor at a manufacturing facility in the Batu Kawan Industrial Zone, with completion targeted by June, analysts said.
With the latest win, year-to-date contract awards are estimated at around RM200 million, lifting the group’s outstanding order book to between RM180 million and RM250 million.
"Critical Holdings is on track to meet its FY2025 record-high replenishment of RM379 million, potentially surpassing last year’s figure," said the research house.
Phillip Capital maintained its 'buy' call with a target price of RM1.80, implying a total return of nearly 128% from the last traded price of 79 sen.
The brokerage cited Critical Holdings’ robust tender pipeline exceeding RM1 billion and noted that semiconductor-focused, fast-track projects typically command stronger margins.
Meanwhile, Maybank Investment Bank also reiterated its 'buy' recommendation, albeit with a more conservative target price of RM1.14, based on 15 times forward earnings, implying an upside of about 44%.