Newsbreak

• EITA Resources Berhad announced that its 60%-owned subsidiary, TransSystem Continental Sdn. Bhd., received a Notification of Award dated 17 August 2026 worth approximately RM221.0m from Syarikat SESCO Berhad. The contract entails carrying out the Mapai 500kV substation and Mapai 275kV substation extension project in Sarawak. The project duration is 25 months, commencing on 7 September 2026. The award will not affect the group's share capital or shareholding structure and is expected to contribute positively to group revenue and earnings across FY27f–FY28f.

M+ Global View

• We view this contract win positively, as it significantly expands EITA’s revenue visibility through FY27f–FY28f, and also reinforces EITA’s technical positioning and execution credentials for high-voltage transmission grid projects under Sarawak Energy (SESCO). While earnings impact for FY26 will be negligible due to project commencement on 7 September 2026, it serves as a major growth catalyst moving forward.
• Executed over a 25-month tenure, the project translates to an annualized top-line contribution of ~RM106.1m. Assuming a conservative net profit margin of 4.5% for high-voltage turnkey works, total project net profit is estimated at RM9.9m. Factoring in EITA’s 60% equity stake in TransSystem Continental, net profit attributable to EITA owners is projected at ~RM6.0m over the contract period (~RM2.9m per annum across FY27f and FY28f), prompting an upward revision to our core earnings forecasts.

Valuation & Recommendation

• Forecast. We upgrade our FY27f and FY28f core PATMI forecasts by 17.9% and 16.9% to RM19.0m (from RM16.1m) and RM20.4m (from RM17.5m) respectively, reflecting incremental contributions from the SESCO project. Our FY26f core PATMI forecast remains unchanged at RM15.0m.
• Maintain HOLD with a higher TP of RM0.69.Following our earnings upgrades, we maintain our Hold call on EITA with a higher target price of RM0.69 (up from RM0.60). The target price is derived based on an unchanged P/E target ratio of 11.0x pegged to our revised FY27f EPS of 6.29 sen. Although the contract win significantly improves earnings visibility, the share price has already rallied ahead of the announcement, largely pricing in the positive momentum.