PETALING JAYA: Sunway Construction Group Bhd
(SunCon) may secure more contract wins in the near term after winning its latest RM386mil data centre (DC)-related projects, say analysts.
Hong Leong Investment Bank (HLIB) Research said backed by about RM17bil in existing tenders and an in-house project pipeline from its parent company, it anticipates more contract awards in the near term for SunCon.
The company’s DC clients’ sizeable long-term capacity plans would also provide SunCon with multiple opportunities for contract upsizing as evident in the past two years, said the research house.
“While there is potential for minor delays for such contract conversions, these are likely to materialise in financial year 2026 (FY26).
“In short, we expect the company to benefit from an intact growth thesis for the DC space as well as projects from its parent company, including hospitals and malls,” it noted.
SunCon secured RM386mil work orders from an undisclosed US-based multinational technology company for site infrastructure works across two DC projects, following a recent RM570mil Johor DC core and shell contract.
The works would commence immediately, with final completion expected by October 2026.
The latest contract win, coupled with a recent general contractor award for a DC project in Johor (RM570mil), takes SunCon’s year-to-date (y-t-d) contract wins to RM4.9bil, well within management’s RM4.5bil to RM6bil target for FY25.
“We expect larger work orders from this client going forward once the current scope for site infrastructure works progresses,” HLIB Research said, adding it is maintaining its “buy” stance on SunCon with unchanged target price (TP) of RM6.35 a share.
Maybank Investment Bank Research (Maybank IB) said fresh after SunCon secured its first major job win of RM570mil after a dry spell of almost seven months, it secured another major job win of RM386mil.
“Y-t-d job wins stand at RM4.9bil or 98% of our financial year estimate and orderbook stands at RM6.4bil. It hopes to bag one more DC job and one more internal job before FY25 is through.
“We maintain our earnings estimates, and a ‘hold’ call and RM5.63 per share TP for the stock,” Maybank IB added.
