The RAK equation: Omnium International on delivering projects in a growing market

KUALA LUMPUR: EGH International Bhd, an interior fit-out specialist, aims to grow its business by leveraging a RM313.5 million order book as it prepares to list on the ACE Market. The company has been assigned a fair value of 18 sen per share by Rakuten Trade Sdn Bhd, based on a projected price-to-earnings ratio of 12 times. EGH International's order book, comprising 18 projects equivalent to roughly one and a half times its FY26 revenue, provides earnings visibility for the next two financial years.

Notable projects include the Park Hyatt Hotel at Merdeka 118 (RM210.7 million) and Antara Genting development (RM143.2 million). The largest project, Armani Hallson KLCC (RM118.9 million), accounts for about 38% of the current order book. The company's expertise spans design, procurement, construction, and installation. Its successful acquisition of large-scale, high-specification projects and planned debt reduction will be crucial for sustaining growth.

Rakuten Trade's IPO proceeds will be used to repay borrowings, enhancing the company's financial flexibility. EGH International is investing in infrastructure to support larger projects and diversify its revenue streams. The company plans to build a five-storey industrial building in Puchong for its new headquarters, warehouse, and showroom.

This expansion aims to bolster its capacity to handle larger fit-out contracts and launch its business-to-consumer (B2C) retail business through a 25,000 sq ft flagship showroom. The company's retail segment has seen growth, from RM1.1 million in FY23 to RM5.7 million in FY26. However, the B2C sales are expected to contribute minimally to earnings in the near term.

As Malaysia's interior fit-out services market grows, the company faces the challenge of converting industry demand into new contracts while maintaining profitability. Despite the existing order book providing near-term revenue visibility, the company's ability to replenish that pipeline, improve margins, and secure larger contracts will determine its sustained earnings growth beyond FY28.

The retail and technology initiatives offer additional avenues for expansion, but their success will depend on effective execution as the group scales up its facilities and broadens its customer reach.