KUALA LUMPUR (Sept 8): Pekat Group Bhd (KL:PEKAT) rose to a new all-time high while analysts scrambled to raise their forecasts after the engineering services company’s latest contract wins.
The consensus is bullish that the firm, which specialises in lightning and surge protection systems, will gain from accelerating data centre construction. Despite commanding nearly half of the market share for such systems, Pekat’s orders on hand make up less than 20% of the potential.
That suggests “ample room for further contract wins”, according to Phillip Capital.
Pekat climbed as much as 12 sen or nearly 6% to RM2.13 in Tuesday trading. The stock ended the day at RM2.07 as more than four million shares exchanged hands.
Shares of Pekat, which also installs solar panels and power distribution equipment, have risen nearly 32% so far this year and lifted its market capitalisation to RM1.5 billion amid major grid upgrades to cope with a wave of energy-hungry data centres mushrooming in Malaysia.
All six research houses covering Pekat have the stock on ‘buy’ with an average target price of RM2.21, according to Bloomberg.
Pekat currently has outstanding orders worth RM797 million and replenishment prospects remain healthy, said MBSB Research, the most bullish research house with a target price of RM2.46 that values the company at 28 times its forward earnings.
“We believe the premium against its peers is justified, given that Pekat differentiates itself from other solar companies” through the manufacturing of power distribution equipment as well as earthing and light protection, which is benefiting from rising data centre projects, the house added.
On Monday, Pekat announced three contracts for earthing and lightning protection systems for an unspecified project and client in Johor worth RM57 million combined.