CIMB Investment Bank Bhd (CIMB Securities) has maintained its BUY call on KJTS Group Bhd with an unchanged target price of RM1.10, saying the latest contract wins by its 71% owned subsidiary iHandal reinforce its Energy-as-a-Service growth narrative, while consensus among analysts stands at Buy: 3, Hold: 1 and Reduce: 0.
The research house said iHandal has signed 10-year savings-sharing agreements with three subsidiaries of Top Glove Corporation Bhd for the deployment of its Heatfuse Heat Recovery System solutions across manufacturing facilities in Selangor. The contracts, formalised over the past 12 months with the latest announced on 22 June 2026, carry guaranteed savings of RM81.2 million over the full tenure.
Under the agreement structure, iHandal will receive 50% of total savings, translating to an estimated contract value of about RM40.6 million or roughly RM4.1 million per year. CIMB estimated annual gross profit contribution of around RM1.4 million to RM1.6 million, assuming margins of 35% to 40%.
The system is designed to capture and reuse waste heat from industrial processes, converting it into hot water for manufacturing use. This reduces energy consumption, operating costs and carbon emissions compared to conventional systems.
CIMB Securities said while earnings contributions from the contracts have largely been reflected in existing forecasts, the key takeaway lies in commercial validation of iHandal’s solution among large energy intensive manufacturers. He noted that adoption across sectors such as gloves, food and beverage and industrial processing highlights expanding addressable demand.
The research house added that no changes have been made to FY26 to FY28 earnings estimates, with the Buy rating and RM1.10 target price retained. It said the acquisition of iHandal strengthens KJTS’s transition from a Cooling-as-a-Service model towards a broader Energy-as-a-Service platform, expanding its long-term growth potential.
As of 11.03 am, KJTS’ stock price gained 0.64% to RM0.79.
