PETALING JAYA: Sunway Construction Group Bhd
’s (SunCon) prospects will likely continue to be lifted by data centre (DC) play and new job wins. UOB Kay Hian (UOBKH) Research said SunCon’s second quarter of financial year 2025 (2Q25) results were “impressive”, beating its and the consensus’s expectations.
It noted that SunCon’s multi-year earnings growth centres on consistent order book replenishment, with a current order book outstanding of RM6.7bil and a tender book of RM14.8bil to continue driving record-high earnings levels throughout 2025 to 2026.
“SunCon reported solid new job wins of RM3.8bil year-to-date after securing two DC packages from a US client (conversion of early contractor involvement DC packages in Klang Valley; a RM1.5bil contract for Rapid Transit System Transport Oriented Development at Bukit Chagar in March, and a RM393mil DC contract for K2 Strategic Infrastructure (K2),” the research house said.
DC works make up 45% of SunCon’s existing order book and would continue to be a key earnings growth driver.
Of the current RM14.8bil tender book, 75% to 80% are DC-related.
The research house maintained a “hold” call on SunCon, albeit with a higher target price of RM6.27 (from RM5.55), stating that capital returns for investors remained modest after a resilient share price (up 26% year-to-date).
Additionally, HLIB Research maintained a “buy” call on SunCon with a target price of RM6.70, justifying the valuation given solid prospects and a projected upshift in an already superior return on equity (more than 30%).
