RHB Research raises UUE Holdings target price after EHV substation joint venture

RHB Research upgraded its valuation of UUE Holdings Bhd, setting a new target price of 70 sen per share, up from 66 sen, while maintaining a "Buy" recommendation. The revision reflects an 18.2-times price-to-earnings multiple for fully diluted 2027 earnings, implying about 16% upside. UUE's wholly owned subsidiary, Kum Fatt Engineering, has entered a joint venture with EGP Infrastructure Investments to deliver extra-high-voltage substation work ranging from 132 kV to 500 kV across Malaysia.

The JV, capitalised with RM1 million, will target projects from Tenaga Nasional Bhd and private sector customers such as data-centre intake substations, with typical contracts valued around RM100 million. Before bidding, the partnership must secure contractor registrations and be listed on TNB's vendor list, potentially partnering with main contractors in the interim. RHB believes the alliance gives UUE quicker access to the EHV market than building the capability internally, leveraging EGPII's expertise and OEM relationships.