iCents eyes Asean

iCents Group Holdings Bhd is among a handful of companies that were listed in 2025 on Bursa Malaysia – and which finished the year in the green, up close to 15%.

The comprehensive cleanroom solutions provider continues to be positive on the company’s outlook this year as there is strong market demand for its products within the semiconductor and data centre segments.

Group managing director Vincent Ong Mum Fei says the encouraging outlook for the current financial year ending June 30, 2026 (FY26) is also supported by a healthy order book which he says is sufficient to support operations for a year.

“We are expecting a balanced mix of approximately 50% cleanroom projects and 50% data centre projects in the coming quarters,” Ong tells StarBiz 7.

At last look, the stock was at 42.5 sen apiece, 77% higher than its initial public offering price of 24 sen.

Ong says the company’s profitability this year is expected to be driven by a higher contribution from high-end semiconductor cleanroom projects, which generally command better margins due to their technical complexity.

“Artificial intelligence (AI)-related data centre projects typically have higher requirements and margins than conventional cloud data centres,” he says.

He says iCents’ strategy is to continue strengthening its core operations in Malaysia while selectively expanding its regional presence in countries like Thailand, Indonesia, Singapore.

“Malaysia remains the primary focus, particularly for cleanroom projects and data centre developments in Johor and Selangor, which are emerging as key data centre hubs.

“At the same time, the company is actively exploring regional opportunities.

“Thailand is emerging as a growing data centre market, while Singapore is strategically important for building relationships with regional decision-makers.

“Although contributions from Indonesia and Vietnam are currently small, the company continues to assess overseas opportunities aligned with its technical expertise,” Ong adds.

For the first quarter ended Sept 30, 2025, iCents made a net profit of RM1.2mil on revenue of RM18.7mil.

Ong says shareholders can expect iCents to focus on executing and monetising its existing order book, while continuing to build its presence in high-growth segments such as semiconductor cleanrooms and data centres.

High customer concentration

The company has secured multiple projects, including overseas projects, although announcements are made only when they meet Bursa Malaysia’s disclosure thresholds or are closer to contract finalisation.

Additionally, the company’s revenue and cash flow are expected to be supported by progressive billings as contract assets are converted into invoiced revenue, Ong says.

This, however, is the company’s key challenge as well.

“Cash flow timing is a challenge as customer payments are typically received 14 to 120 days after invoicing,” Ong says.

He notes that maintaining a steady pipeline of new projects to sustain growth is also a challenge, especially as 70% to 75% of the company’s order book is tender-based.

“Another key challenge is customer concentration as one major customer completed its projects in FY25 and new replenishment orders are still pending.”

In her report on the company, RHB Research analyst Queenie Tan says some 80.9%, 73.11% and 73.9% of the group’s revenue was derived from the top three customers in FY22, FY23 and FY24.

“This dependency exposes the company to revenue volatility, reduced bargaining power, and potential strategic misalignment if the customer reduces orders, switches suppliers, or encounters financial or operational challenges.”

She says diversifying the customer base is critical to mitigating this risk, but such efforts may require time and investment, posing challenges to near-term stability.

Tan also notes that the company’s revenue is sensitive to any fluctuations in the semiconductor and electrical industries, which accounted for 84.9%, 87.1%, and 84.8% of total revenue for FY22, FY23 and FY24.

Any slowdown in the global or Malaysian semiconductor and electronics industries could negatively impact demand for its cleanroom services and other facility services, she says.

Tan says iCents’ cleanroom and facility service projects are executed based on contracts, purchase orders, or work orders that may be terminated or suspended before completion due to factors such as customer insolvency, payment default, strategy changes, market downturns, or force majeure events.

“Any early termination or suspension could result in unrecoverable costs, loss of billed revenue, and foregone profits.

“Although the group has not encountered such incidents to date, there is no assurance that this risk will not materialise in the future.”

She points out that the group’s revenue is mainly derived from fixed lump sum contracts, purchase orders or work orders that are for the provision of specific services and products.

“If iCents is unable to secure new and sizeable projects in a timely manner, the order book may reduce over time, and this would negatively affect its business sustainability and financial performance.

“Additionally, the order book may be subjected to risks of unexpected adjustments to the scope of work, which could reduce its value.”

That said, she reckons iCents is primed for strong earnings growth, supported by a “solid” construction orderbook, record pipeline of tenders and rising enquiries at its higher-margin manufacturing arm.

It is also well-positioned to benefit from South-East Asia’s accelerating data centre boom and semiconductor sector recovery while trade tensions drive supply chain diversification to neutral manufacturing hubs, creating new greenfield opportunities for cleanroom players.

Tan has a fair value of 64sen on the iCents stock.

Ong admits that as the company undertakes more technically complex semiconductor cleanroom and AI-related data centre projects, strong execution, cost control and quality management remain vital overall components.