KUALA LUMPUR (June 8): Eita Resources Bhd (KL:EITA) rose on Monday to a 10-month high as investors cheered a contract win amid broader market selldown.
Malacca Securities, one of only two research houses covering the stock, upgraded the stock to a 'buy' from 'hold', as the share price of Eita had fallen ahead of the news. The house, however, kept its target price at 52 sen.
“We view this contract win positively,” the house said, noting that the fast-track five-month execution timeline ensures immediate earnings for the final quarter of its financial year ending September 2026, the house added.
Shares of Eita rallied on Monday, touching an intraday high of 56 sen — their highest level since August 2025. The stock subsequently pared some of its gains to close at 54.5 sen, valuing the company at RM164.5 million.
Eita has lost about 10% of its value in a little over a week ahead of the contract announcement on Friday amid news of weaker than expected second-quarter earnings.
The contract represents a “crucial operational win” that provides a vital volume for Eita’s underperforming busduct business, while solidifying Eita’s presence in the lucrative Johor data centre infrastructure pipeline, Malacca Securities said.
The project could contribute up to RM2.5 million to earnings based on conservative margin of 6%, though the research house said it is keeping its earnings forecasts for now as the win is still within its expectations.
Tradeview Research, the other house covering Eita, has the stock on 'hold' recommendation.