CBH Engineering Holding Bhd is projected to maintain margin growth through the second half of its financial year 2026, driven by a more favorable project composition, according to industry research. The company’s outstanding order book is now heavily weighted toward higher-margin data centre substation projects, which represent about 90% of its backlog.

TA Research reported that CBH’s core net profit margin for the first half of FY26 reached 20%, surpassing its initial estimate of 15%. The engineering services provider posted core net earnings of RM42.6 million during the period, marking a 170.4% increase compared to the same period last year.

With an unbilled order book totaling RM890 million, CBH management anticipates recognizing 35% to 40% of this amount in the second half of FY26. This would result in an order-book burn rate between RM311.5 million and RM356 million, representing growth of approximately 48% to 69.1% relative to the RM210.5 million recognized in the first half.

The execution pace of the order book supports projected total revenue for FY26 to range from RM522 million to RM566.5 million, aligning closely with analyst forecasts. Assuming a net margin of 17%—up from a previous assumption of 15%—TA Research estimates CBH’s net earnings for FY26 could reach between RM88.7 million and RM96.3 million, significantly exceeding its earlier forecast of RM81.1 million. This suggests the company is positioned to deliver a record-high financial performance for the year.

Year-to-date, CBH has secured RM477.3 million worth of new contracts, achieving nearly 80% of TA Research’s full-year new contract target of RM600 million. Based on a historical tender success rate of 25% to 30%, analysts estimate that CBH’s current tender pipeline could yield an additional RM250 million to RM300 million in order wins, providing further order book visibility.

It is notable that the RM1 billion tender book reflects only formally submitted tenders, with additional data centre-related opportunities still in the finalization stage and not yet included in the pipeline, further underscoring potential future growth.

TA Research has assigned a “buy” recommendation to CBH Engineering, raising its target share price to RM1.42 from RM1.12, reflecting confidence in the company’s continued margin expansion and order book strength.