Cheeding Holdings Berhad IPO's Analysis

Cheeding Holdings Berhad

Cheeding Holdings Berhad, through its subsidiaries, is primarily involved in providing utilities engineering solutions in Malaysia. Its main activities include the Engineering, Procurement, Construction, and Commissioning (EPCC) and maintenance of overhead and underground power infrastructure, as well as substation engineering services. The company undertakes projects for major utility providers, handling the entire project lifecycle from design and procurement to construction and commissioning of transmission lines, pylon towers, and substations. Its subsidiary, Pembinaan Bukit Cheeding, is the main operational arm for these engineering solutions, while BC Services supplies related electrical and civil engineering services for the group's projects.

IPO Details
Market: ACE
Principal Adviser: TA Securities Holdings Berhad
Issuing House: Malaysian Issuing House (MIH)
Shariah Status: SC (Yes)
Listing Price: 0.36
PE Ratio: 10.91
    PE (FYE): 10.91
    PE (FPE Annualised): -
    PE (Hybrid): -
MITI allocation?: Yes
Closing Date: 23-Sep-2025
Balloting Date: 25-Sep-2025
Listing Date: 07-Oct-2025
Oversubscription rate: 40.87x
Average Analysts FV :
RHB (0.68), Mplus (0.72), Apex (0.73), Public Invest (0.80)
iSaham IPO Score :
Market Cap: 287.01 M
Number of Shares: 797.26 M
IPO Allocations No. of Shares %
Malaysian Public 39.86 M 5.0%
Bumiputera shareholders approved by MITI 99.66 M 12.5%
Eligible Directors and employees 8.168 M 1.02%
Private placement to selected investors and others 60.311 M 7.56%
Total Allocations 208.00 M 26.09%

Offer for Sales of 65.00 M existing shares representing 8.15% enlarged shares.

Public Issue of 143.00 M new shares representing 17.94% enlarged shares.

Median Sectors PE: N/A
Median Peers PE:
Utilisation of Proceeds
Purpose Amount (RM'000) %
Expansion Performance bond for future projects 16,150 31.37
Expansion Capital expenditure 3,200 6.22
Working capital Working capital 24,630 47.84
Listing expenses Estimated listing expenses 5,200 10.1
Debt Repayment of bank borrowings 2,300 4.47
Total 51,480 100
Analyst Highlights
Date Analyst Highlights
11-Dec-2025
Apex
  • Secured RM13.5m contract from TNB, boosting unbilled order book to RM231.7m (2.0x FY25 revenue) and strengthening medium-term execution visibility.
  • No change to earnings forecasts as the contract win aligns with the existing order book replenishment assumption.
  • Maintain BUY rating with an unchanged target price of RM0.96, based on 20x FY27F EPS of 4.8sen.
24-Nov-2025
Apex
  • CHEEDING's 2QFY26 CNP of RM8.7m (6MFY26 CNP RM15.6m) exceeded expectations (52.7% of FY26F forecast) due to better-than-expected margins from EPCC in overhead infrastructure.
  • Earnings are expected to remain strong in sequential quarters, driven by progressive revenue recognition from ongoing EPCC projects entering accelerated execution.
  • Margin assumptions for EPCC in overhead infrastructure are raised due to stronger-than-expected profitability, resulting in upward earnings revisions by 12.4%/13.2%/11.2% for FY26F-FY28F.
06-Oct-2025
Apex Securities
  • Healthy tender book at RM350m, IPO to ease limitations and expand tendering.
  • Strong core net margins (>20%) well above sector averages.
23-Sep-2025
Apex Securities
  • CHEEDING is an established transmission builder, deriving c.69% of FY25 revenue from EPCC of overhead lines.
  • Licensed up to 500kV, CHEEDING holds a strong competitive moat and margin profile.
23-Sep-2025
Public Invest
  • Rising demand: Supported by long-term economic expansion, population growth, and data center/property market growth.
  • Robust order book: RM202.7m secured projects as of Aug 2025 provides revenue visibility and near-term growth support.
  • Strategic growth initiatives: Expanding into underground and substation projects, establishing design department, pursuing large-scale projects.
22-Sep-2025
RHB
  • Riding on Tenaga Nasional's capex upswing, demand for electricity is resilient.
  • Launched underground infrastructure division to capture integrated DC tenders.
22-Sep-2025
Mplus
  • Healthy net profit margins and EPS growth relative to peers.
Utilisation of Proceeds
Business Segments
Geographical Segments
Major Customers
Revenue by Financial Year Ended
Profit After Tax (PAT) by Financial Year Ended
SWOT Analysis
Strengths
  • Strong financial performance with a revenue CAGR of 130% from FY2022 to FY2025, and PAT growing from a loss of RM0.28 million to a profit of RM26.35 million in FY2025.
  • Robust order book of RM202.67 million as at the LPD, providing strong earnings visibility as it represents 1.72 times the FY2025 revenue.
  • Established track record of approximately 18 years in the power infrastructure utilities industry and is a registered Grade G7 contractor with CIDB and an approved contractor for Tenaga Nasional Berhad (TNB).
  • Experienced management team led by the founder, who possesses approximately 42 years of experience in the construction industry.
Weaknesses
  • Extreme customer concentration risk, with Tenaga Nasional Berhad (TNB) accounting for 98.34% of total revenue in FY2025 and 99.26% of the current order book.
  • Dependent on a key supplier, Rohas-Euco, for pylon towers, which constituted 28.31% of total material purchases and subcontractors' fees in FY2025.
  • High reliance on foreign labor, with foreign workers making up approximately 70% of the total workforce, exposing the company to risks related to labor policies and availability.
  • Revenue is project-based, which may lead to fluctuations in financial performance depending on the timing and scale of new contract awards.
Opportunities
  • Positioned to benefit from the growing power infrastructure market, driven by national initiatives like the National Energy Transition Roadmap (NETR) and the increasing development of data centers.
  • IPO proceeds allocated for performance bonds (RM16.15 million) will enhance the company's capacity to tender for larger projects, potentially supporting contracts up to RM323 million.
  • Strategic plans to expand service offerings into underground utilities and substation engineering, and to establish an in-house Design Department, which could diversify revenue streams and improve margins.
Threats
  • Business prospects are heavily tied to the capital expenditure of TNB, which can be influenced by changes in government policies and national economic conditions.
  • Exposure to commodity price volatility, particularly for steel and copper used in pylon towers and cables, which could lead to cost overruns and impact project profitability.
  • Operates in a competitive industry where projects are awarded through competitive bidding, which may exert pressure on pricing and profit margins.
Key Highlights

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Conclusion

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