KUALA LUMPUR: EGH International Bhd is banking on a RM313.5 million order book, improving margins and a stronger balance sheet to drive earnings growth as the interior fit-out specialist prepares to make its debut on the ACE Market.
Rakuten Trade Sdn Bhd has assigned the company a fair value of 18 sen per share, based on a forecast price-to-earnings ratio of 12 times, citing its project pipeline and earnings prospects.
The research house forecasts EGH International to register core net earnings of RM12.3 million in the financial year ending March 2027 (FY27) and RM14.6 million in FY28.
The company's outstanding order book comprises 18 projects, equivalent to about 1.7 times its revenue in FY26, providing earnings visibility over the next two financial years, with the bulk expected to be billed in the remainder of FY27 and FY28.
Among its notable projects are the Park Hyatt Hotel at Merdeka 118, valued at RM210.7 million, and the Antara Genting development, worth RM143.2 million.
Its largest outstanding project is Armani Hallson KLCC, valued at RM118.9 million, accounting for about 38 per cent of the current order book. Work on the project is scheduled to commence in January 2027.
EGH International has more than 15 years of experience providing turnkey interior fit-out services, covering design, procurement, construction and installation.
The business contributed about 92.1 per cent of the group's FY26 revenue, with the balance coming from the sale of furniture, fittings and equipment (FF&E) and building materials.
Rakuten Trade said the company's ability to secure more large-scale, high-specification projects would be crucial to sustaining growth, while its planned post-listing debt reduction could improve its capacity to compete for new contracts.
Of the initial public offering (IPO) proceeds, RM14.4 million will be allocated to repay borrowings, strengthening its financial flexibility and tendering capacity.
Following the listing, net gearing is forecast to fall to 0.04 times from 2.42 times currently, giving the company greater balance-sheet headroom to pursue new projects and expand its operations.
Beyond its core fit-out operations, EGH International is investing in infrastructure to support larger projects and broaden its revenue streams.
The company plans to construct a five-storey industrial building spanning 130,000 sq ft in Puchong to house its new headquarters, warehouse and showroom.
The expanded facilities are expected to strengthen its ability to handle larger fit-out contracts while providing a platform for the growth of its business-to-consumer (B2C) retail business.
Operating under the IPO World business and Interior Premium Outlet brand, the company sells FF&E products and building materials directly to consumers.
The segment has gained traction, with B2C sales increasing from RM1.1 million in FY23 to RM5.7 million in FY26.
To build on this growth, EGH International plans to establish a 25,000 sq ft flagship showroom at its new headquarters and open additional showrooms.
It is also developing a partner-based model that would enable interior designers and contractors to access artificial intelligence-powered design software linked to the company's product catalogue.
The initiative could create a new sales channel by connecting interior design work with product sourcing. However, with the model still at an early stage, the retail business is unlikely to be a significant near-term earnings driver.
EGH International's expansion plans come amid an expected increase in demand for interior fit-out services in Malaysia.
Independent market researcher Infobusiness Market Research Sdn Bhd projects the market to grow from RM4.7 billion in 2025 to RM6.1 billion in 2030, representing a compound annual growth rate of 5.2 per cent.
The projected growth is underpinned by property market activity, an expanding hotel supply and rising demand from the private healthcare sector.
These segments offer opportunities for fit-out specialists as developers, hotel operators and healthcare providers require specialised interior construction and installation services.
For EGH International, the key challenge will be converting industry demand into new contracts while maintaining project execution and profitability.
Although its existing order book provides near-term revenue visibility, its ability to replenish that pipeline, improve margins and secure larger contracts will determine whether it can sustain earnings growth beyond FY28.
Its retail and technology initiatives offer additional avenues for expansion, but their contribution will depend on execution as the group scales up its facilities and broadens its customer reach.
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