Riding on a robust RM6.4bil order book and RM5.2bil worth of job wins last year, the group is eyeing strong years in 2026 to 2027.
PETALING JAYA: If you have been keeping an eye on the construction sector, Sunway Construction Group Bhd
is set to stay in the fast lane.
Riding on a robust RM6.4bil order book and RM5.2bil worth of job wins last year, the group is eyeing strong years in 2026 to 2027.
UOB Kay Hian (UOBKH) Research said this will be fuelled by a healthy pipeline of data centres, infrastructure projects and internal job flows from parent company Sunway Bhd.
“Sunway Construction reported solid new job wins of RM5.2bil in 2025, meeting management’s guidance.
“Its 2026 to 2027 earnings growth remains supercharged, leveraging a healthy outstanding order book on hand of about RM6.4bil, which is over one times revenue cover,” the research house said in a note to clients.
“Management has also guided an order-book target of RM4.5bil to RM6bil in 2026, which is highly attainable in our opinion.”
The group’s tender book as at the third quarter of ended Sept 30, 2025 (3Q25) stood at RM18.2bil. Sunway Construction is well-positioned to clinch more contracts in 2026 to 2027, according to UOBKH Research.
As for the stock’s valuation, it said it remains attractive, underpinned by the group’s strong net cash position of about RM1.4bil and improving cash flow.
“Notably, the group declared a positive surprise of 23 sen special dividend in 3Q25, lifting dividend yield to around 7%.
“Adjacent with the year-on-year earnings growth, we forecast a 100% dividend payout ratio in 2026 to 2027, implying a lush prospective yield of over 5%,” the research house said, not ruling out a potential special dividend given that it has sufficient room for better capital management.
Touching on the conditional voluntary take-over offer (VTO) by Sunway to acquire IJM Corp Bhd, the research house said Sunway Construction will largely benefit from various synergies if the VTO is successful.
“For example, Sunway Construction can fill in the gap with potentially more piling or mechanical, electrical and plumbing works for IJM’s contracts.
“Plenty of cost savings can also be achieved from centralised procurement, better machinery utilisation, and economies of scale.
“These margin and scale enhancements should eventually also increase its tender competitiveness for large-scale projects,” UOBKH Research said.
The research house kept its “buy” call and target price of RM6.66, which implies 22 times 2026 forecast price-to-earnings.
The stock traded at RM5.86 at the time of writing, translating to a market cap of RM7.74bil.
Sunway Construction’s net profit surged to RM83.78mil for the 3Q25 from RM46.47mil in the same period last year, mainly driven by data centre and in-house projects.
Revenue for the quarter jumped to RM1.45bil from RM865.33mil previously, supported by growth in both the construction and precast segments.
