Summary 

• 3QFY26 turnaround. To recap, EITA registered a core PATMI turnaround to RM7.2m in 3QFY26, compared to a core net loss of RM0.4m in 3QFY25. The improved performance was propelled by a RM5.4m PBT turnaround in the Manufacturing segment to RM2.4m (vs. LBT of RM3.0m in 3QFY25), higher PBT recorded in the marketing and distribution segment and services segment, and also narrowed HV system losses. While EITA’s 9MFY26 core PATMI recorded at RM11.5m, 7.6% YoY lower than RM12.4m in 9MFY25, we expect EITA to end FY26 stronger, driven by fast-tracked Busduct deliveries for regional data centre projects and lowered losses in HV segment.
   
• Mapai 500kV substation execution. According to the management, the RM221.0m SESCO Mapai project (commencing 7 September 2026 over 25 months) executed by 60%-owned TransSystem Continental carries an estimated GP margin of 13%, translating to a total GP contribution of RM17.2m for EITA. This marks EITA’s maiden 500kV substation project in Sarawak, with management expecting to participate in additional tender opportunities in CY27.
   
• HV segment loss reduction timeline. The management expects HV segment to remain loss-making in FY27, but losses will narrow significantly before reaching operational breakeven in FY28 as project execution accelerates.
   
• Manufacturing segment turnaround in 3QFY26. The Manufacturing segment achieved a strong RM4.5m PBT swing into profitability in 3QFY26 (posting a PBT of RM2.4m vs. an LBT of RM2.1m in 2QFY26), propelled by a 66.9% QoQ revenue surge mainly led by Busduct deliveries for the Indonesia data centre project. Management expects 4QFY26 performance to be even stronger with concurrent contributions from both the Indonesia and Johor Busduct projects, with operational momentum sustaining into 1HFY27.
   
• Orderbook targeted to hit RM1.0bn mark by year end. Driven by rapid order wins across all its segments, management projects EITA’s total outstanding orderbook to reach RM1.0bn by the end of CY26, representing a substantial expansion from RM423.9m as of 30 June 2026.

M+ Global View

• We adopt a more optimistic stance on EITA following our meeting with management. Growth is set to be strongly anchored by the high demand for Busduct, supported by EITA’s growing exposure to regional data centre infrastructure projects across Johor and Indonesia. Meanwhile EITA's ongoing orderbook expected to hit RM1.0bn by end CY26 will provide multi-year earnings visibility for the Group.
   
• Operationally, the SESCO Mapai project's 13% GP margin provides a solid GP base of RM17.2m for EITA’s 60% stake over the 25-month tenure. Crucially, as HV segment losses narrow significantly in FY27 and turn operationally breakeven in FY28, this will progressively reduce unabsorbed tax losses and normalize the group’s elevated effective tax rate, unlocking higher net profit conversion at the bottom line.

Valuation & Recommendation

• Forecast. Following stronger Busduct execution and narrowing losses in the HV segment, we raised our FY26f–FY28f core PATMI forecasts by 24.2%/14.5%/16.5% to RM19.0m/RM22.9m/RM25.4m, from RM15.3m/RM20.0m/RM21.8m previously.
   
• Upgraded to BUY with a higher TP of RM0.83. Following our earnings upgrades, we upgraded our call on EITA from Hold to Buy with a higher target price of RM0.83 (up from RM0.69). The target price is derived based on the P/E ratio of 11.0x pegged to our revised FY27f EPS of 7.57 sen.