Jati Tinggi powers higher
WITH artificial intelligence (AI) as the new pinnacle, many are betting on data centres (DCs). This includes Jati Tinggi Group Bhd.
The engineering group is betting on the electricity infrastructure needed to power the next phase of digitalisation.
Malaysia’s rapidly expanding DC industry has seen strong demand for electricity supported by AI, renewable energy (RE) and regional grid connectivity.
Managing director Datuk Seri Lim Yeong Seong says as AI adoption accelerates through all walks of life, the demand for electricity and power will continue to garner pace.
Speaking exclusively to StarBiz 7, Lim says electrical energy has become a must.
“The growing use of AI, from large language models and engineering applications to future applications in healthcare and robotics, will continue to drive demand for computing power and, consequently, electricity,” he explains.
“Malaysia’s DC electricity demand has increased rapidly from 2.3GW to 8.3GW in the first quarter of 2026 – nearly four times in just three years, and this will continue accelerating,” Lim opines.
As larger DCs above 100MW require 275kV transmission infrastructure and high-capacity power supply, Lim reckons this is creating further opportunities for Jati Tinggi, given its capabilities cover 11kV to 500kV.
The very first DC-related project that Jati Tinggi secured was a 275kV cable laying project for 10km.
It’s worth noting that Jati Tinggi began its operations doing manholes and piping for Tenaga Nasional Bhd in Putrajaya back in 2003.
Lim remembers how there were no actual roads in Putrajaya at that time, only palm oil plantations, muddy terrains and a lot of dust.
Despite this, working in an area like that gave the company a strong foundation and the experience to become a professional contractor as it grew.
Today, with a track record spanning more than 23 years, Jati Tinggi not only has end-to-end capabilities, but is also vertically integrated in its underground utilities segment.
While buoyed by its ability to deliver, Lim says his confidence in Jati Tinggi rises from the fact that the power industry will remain sustainable for the next three years or so.
The unique thing about being a part of a DC project is its timing, he adds.
“Time is of the essence, you have to commission the cables because DC operators invest a lot of money into these projects. If there is a delay of even one day, the financial loss is very high.
“So, being involved in a DC is really a double-edged sword,” Lim explains.
He points out that going into the DC industry also comes with a high barrier.
“Any sort of work on a DC requires a competent contractor, it’s never about who is the cheapest. If a contractor fails to deliver, there are penalties involved,” he says.
Nevertheless, Lim says Jati Tinggi is not planning to focus only on securing projects to do with DC’s.
The company has continued to tender for projects across the broader power infrastructure space.
There are plenty of opportunities emerging from RE as well, he adds.
“Another key growth driver is the Asean power grid that supports the power industry. The grid is all linked to Singapore at the end.
“Right now, there are seven sources of power, Laos, Cambodia, Vietnam, Thailand, Indonesia, Sarawak and Singapore.
“In order for the grids to be connected, substations need to be upgraded so this is another opportunity for us,” he says.
This could very well translate into more ultra-high-voltage projects, including 500kV substations for the company.
“Such projects can involve investment of between RM800mil and RM1bil per substation, with construction periods typically lasting about 18 months to two years,” he notes.
Jati Tinggi’s order book, which has a two- to three-year duration, currently stands at RM880mil, while its tender book is worth about RM2.7bil.
The company has secured RM332mil worth of contracts in the current financial year-to-date (y-t-d), 92% of them DC-related.
As at the end of July 2026, DC works accounted for almost half of its RM880mil order book.
Lim says the power industry has faced a bottleneck – with some of the biggest constraints including transformer shortages, switchgear shortages, a lack of manpower and copper price volatility.
“As project timelines are getting shorter, execution efficiency and resource planning are becoming so important,” he says.
One other aspect that will see Jati Tinggi move into the upstream sector is via its acquisition of 51% of Roflex Pipe Sdn Bhd.
Lim says it wasn’t an unrelated merger and acquisition (M&A) transaction, as the company had already been a supplier to Jati Tinggi.
“Instead of continuing to purchase from four or five other suppliers, we saw this acquisition as a strategic move.
“Roflex has added four production lines on top of its four lines that are already in production,” he explains.
Lim also says about 60% of what Roflex produces is bought by Jati Tinggi, which means the company is unlikely to run out of parts needed for its cable work.
As for other M&As, Jati Tinggi is looking for opportunities that will benefit them.
“Vertical integration is definitely something that we are looking at. And the same goes to expansion into other countries.
“For now, we will look within the region. As it is, there is still plenty of potential in Malaysia,” he stresses.
The one research house covering the stock has signalled a positive trajectory for Jati Tinggi.
AmInvestment Bank Bhd expects stronger revenue visibility from an enlarged order book and earning contributions from Roflex.
“We revise our revenue forecasts upward, supported by resilient order book replenishment of RM332.6mil in first half of financial year 2026 (FY26), but have lowered our gross profit margin assumption across FY26 to FY28 to reflect rising raw material costs,” it said.
The brokerage maintains a “buy” call on the stock with an unchanged target price of RM1.
As for its share performance, Jati Tinggi was up roughly 45% y-t-d at the time of writing at 93.5 sen. It hit a low of 45 sen in May this year before bouncing back.
The share closed 3.78% higher on Wednesday at 96 sen.