Econpile Holdings Bhd has secured a RM39.5 million contract from WCT Holdings Bhd to undertake earthworks, bored piling and substructure works for a commercial development in Old Klang Road (OUG), marking its first contract win for the financial year ending June 2027 (FY2027).
According to CGS International Research, the contract involves foundation and substructure works for WCT’s W City OUG commercial development in Kuala Lumpur.
The project comprises four five-storey commercial shop blocks housing 68 units, two levels of basement parking, a standalone commercial unit, a main switch station and a refuse chamber.
The development forms part of WCT’s RM626 million gross development value (GDV) W City OUG project, which is included in the group’s planned RM1.5 billion property launches for calendar year 2026.
The latest award increases Econpile’s outstanding orderbook to RM664 million as of July 2026.
Although the company has yet to provide formal guidance for FY2027 contract wins, CGS International expects Econpile to at least match the RM405 million worth of contracts secured during FY2026.
The research house estimates the latest WCT contract will generate a gross profit margin of approximately 10%, broadly in line with Econpile’s previous lump-sum piling contracts.
CGS International said a more stable operating environment should enable the company to exercise tighter control over construction costs, helping preserve margins despite ongoing inflationary pressures.
Despite volatility in construction input costs, Econpile continues to experience healthy tender activity, suggesting demand for piling works remains resilient.
As at the end of March 2026, the company maintained a strong financial position with net debt of just RM1.7 million, supported by robust operating cash flow.
CGS International believes the company’s healthy balance sheet places it in a stronger position than many of its industry peers to navigate the current challenging operating environment while pursuing new project opportunities. It reiterated its “Add” recommendation on Econpile with an unchanged target price of 24 sen, based on 24 times calendar year 2027 forecast earnings, equivalent to one standard deviation above its historical valuation average since FY2022.
The research house described the stock as deeply undervalued, noting that it is currently trading at around 0.5 times FY2026 forecast price-to-book value, near the lower end of its historical valuation range.
The last time Econpile traded at similar valuation levels was in October 2022 during heightened uncertainty following the Russia-Ukraine conflict, before the stock subsequently re-rated in 2023 and 2024.
CGS International expects a similar re-rating could materialise should construction cost pressures ease and the company continue securing new contracts.
Potential catalysts include progress on the proposed Sungai Klang Link project, the rollout of major national infrastructure developments and further moderation in raw material costs.
However, delays to large infrastructure projects and renewed increases in construction material prices remain the key downside risks to the company’s outlook, the research house said.
