PETALING JAYA : Econpile Holdings Bhd has secured its first contract under the Penang Light Rail Transit (LRT) Mutiara Line, a development that positions the company for additional job wins as the RM10 billion project gains momentum.
On 5 June, Econpile announced its award of a RM42.8 million bored piling sub-contract covering three stations from East Jelutong to Gelugor, part of the overall 21-station alignment. Construction works are scheduled to commence on 1 August 2025 and are expected to conclude by 31 October 2027.
According to CGS International (CGSI) Research, this development confirms expectations that the Penang LRT Mutiara Line is progressing according to schedule, with full-scale construction anticipated in the fourth quarter of 2025.
CGSI highlighted that the broader construction sector stands to benefit significantly, particularly Gamuda Bhd, which is expected to secure an additional RM3 billion in contracts, supplementing its existing RM5 billion in awarded works for the project. Other potential beneficiaries include Malayan Cement Bhd, HSS Engineers Bhd, IJM Corp Bhd, and Sunway Construction Group Bhd.
As at June 2025, Econpile’s new job wins for the year total RM333 million, contributing to an order book valued at RM487 million. The group is targeting RM400 million to RM450 million in new contract wins for the financial year ending 31 December 2025, maintaining a performance trajectory consistent with the previous year.
CGSI noted that the Penang LRT bored piling contract is expected to yield a gross profit margin of approximately 10% to 15%, surpassing the margins from recent property development-related piling contracts. This improved profitability is projected to support stronger earnings performance in the fourth quarter of 2025.
CGSI Research has reiterated its “add” rating on Econpile, with a target price of 46 sen, citing the group’s robust presence in infrastructure works and its position as the operator of the largest bored pile fleet in Malaysia.
CIMB Securities Research also commented on the contract, noting that it forms part of a broader civil works package undertaken by the SRS Consortium Sdn Bhd, led by Gamuda (60%), Ideal Property Development Sdn Bhd (20%), and Loh Phoy Yen Holdings Sdn Bhd (20%). The project developer and asset owner of the Mutiara Line is Mass Rapid Transit Corp Sdn Bhd.
Having secured this initial major piling contract, CIMB Research believes Econpile is strategically positioned to compete for larger upcoming piling-related works. The firm maintains a “buy” rating on Econpile, with a target price of 38 sen, reflecting a valuation of 19 times its projected 2026 core earnings per share of 1.9 sen.
-The Star
