OCK Group has recently secured three new data centre (DC) backup power solutions contracts valued at RM32.5 million. These new contracts involve supplying, delivering, installing, testing, and commissioning underground storage tanks and fuel distribution systems. The projects also include cabling works for backup power systems designed to ensure uninterrupted operations for data centres during power disruptions. The successful acquisition of these contracts highlights OCK's robust position in the data centre sector and its ability to drive strategic revenue through end-to-end infrastructure and connectivity solutions.

Analysts remain optimistic about OCK Group's prospects, with a BUY rating maintained by RHB Stock Broking House and a target price of RM0.82, representing a 40.2% upside. The firm's end-to-end capabilities and recent contract wins support a favourable outlook, with a forecasted FY25 core earnings compound annual growth rate (CAGR) of 19%. This target price includes a 2% premium based on OCK's ESG rating of 3.1 out of 4. Similarly, Kenanga has reiterated its OUTPERFORM rating and a target price of RM0.86, reflecting the anticipated contribution of these contracts to FY24 and FY25 earnings.

The recent contract wins boost OCK's outstanding data centre power solutions order book to over RM50 million. This includes projects for major data centres in Iskandar Puteri and demonstrates the group's capability in securing and executing significant power solution projects. Analysts estimate that these contracts will contribute approximately 3% to FY24 and FY25 earnings. The increase in approved investments in Malaysia's data centre sector, driven by substantial investments from hyperscalers, is expected to further benefit OCK.

In addition to the power solutions contracts, OCK is also pursuing fibre network connectivity projects for data centres. This aligns with the company's strategy to expand its role in the data centre sector, particularly as the domestic market is projected to hit new records in 2024. The group's tender book, valued at over RM500 million, includes various projects in the telco network services and digital segments, further solidifying its growth prospects.

Management's optimism extends to OCK Digital, the company's newly established digital arm, which is anticipated to deliver triple-digit revenue growth over the next two financial years. The arm has a tender book of RM300-400 million, comprising primarily government and enterprise-related jobs.