KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB) expects Southern Cable Group Bhd to deliver a strong quarter-on-quarter earnings growth in the fourth quarter of the financial year 2025 (4Q FY2025), driven by a further ramp-up in the East Coast Rail Link (ECRL)-related deliveries.
In a note today, the investment bank said the strong performance would bring Southern Cable’s FY2025 core earnings to hit HLIB’s forecast of RM130.9 million.
“We see earnings momentum carrying on to 1Q FY2026 despite the completion of ECRL jobs, as management highlights a sizeable backlog of 132 kilovolts solar-related orders slated for execution post- ECRL, supporting a healthy near-term run rate,” it said.
The bank also foresees the upside risk to its FY2026 core earnings forecast of RM151 million if this run rate is sustained or gains further traction.
“Our model currently assumes a 15 per cent revenue growth in FY2026, largely reflecting the full- year impact of last year’s capacity expansion,” said HLIB.
Therefore, the bank maintained a “buy” rating on Southern Cable with an unchanged target price of RM2.59 per share. – BERNAMA
