KUALA LUMPUR (May 11): Electrical engineering service provider HE Group Bhd (KL:HEGROUP) has bagged an RM86 million award for the construction of a substation in Selangor.

Under the scope, HE Group will construct a 132kilovolts/33kilovolts substation, with completion targeted by Oct 31, 2027. This contract is expected to contribute positively to the company’s financial performance over its duration.

The contract was awarded to its wholly owned subsidiary, Hexatech Engineering Sdn Bhd, which principally focused on power distribution systems for end-user premises such as industrial plants, as well as both industrial and commercial substations.

Following the latest award, HE Group’s order book stood at approximately RM150 million, providing the group with a steady pipeline of works and earnings visibility.

In a statement, its managing director Haw Chee Seng said this contract further strengthens the group’s track record in undertaking power distribution system and substation related works, particularly involving critical electrical infrastructure.

“At the same time, we are progressively expanding our exposure towards industries supported by long-term structural growth trends, particularly data centres, semiconductors, and renewable energy-related infrastructure.

“Malaysia’s growing position as a regional digital and technology hub, alongside ongoing investments into the semiconductor supply chain and energy transition initiatives, provides a strong platform for us to secure further contracts in these segments,” he concluded.

HE Group’s share price dropped half a sen or 1.47% to 33.5 sen at Monday’s market break, giving the group a market capitalisation of RM147 million.

The stock is trading at a trailing price-earnings (PE) ratio of 13.6 times, according to AskEdge data. Its valuation is generally lower than that of its peers, including Kinergy Advancement Bhd’s (KL:KINERGY) PE of 27.8 times, CBH Engineering Holdings Bhd’s (KL:CBHB) PE of 24.3, EITA Resources Bhd’s (KL:EITA) PE of 23.2 times and MN Holdings Bhd’s (KL:MNHLDG) PE of 19.3 times.