PETALING JAYA: AWC Bhd
is expected to record steady near-term earnings growth driven by the ramping up of revenue recognition from high-value wins in its facilities division, according to Apex Securities Research.
The contracts secured by the engineering services company include TM Data Centres (RM99.1mil), Kompleks E (RM82.5mil), Masjid Putra (RM52.3mil), and the recently announced one-year extension with Hospital Shah Alam worth RM26.14mil.
“AWC has maintained a long-standing operational presence at Hospital Shah Alam since the facility first commenced operations in 2016,” said Apex Research in a note.
It estimated, based on a conservative 4% margin, that the extension could contribute RM1.05mil in pre-tax profit over the next year.
Representing 3.6% of its pre-tax profit forecast of RM29.5mil for the group’s financial year ending June 30, 2026 (FY26), it would make up a “modest and visible contribution from a single-site contract”, the research house said.
“We view this contract extension positively. It underscores AWC’s ability to retain healthcare mandates through operational excellence and reinforces the predictability of its facilities division revenue stream.”
Apex Research opined that the Hospital Shah Alam extension would bolster the positive trajectory of AWC’s facilities segment, which is its largest revenue contributor.
It said the segment accounted for around 50% of its revenue for the first half of its financial year 2026 (1H26), which stood at RM115.8mil.
“The division delivered a 154.3% quarter-on-quarter (q-o-q) pre-tax profit jump in for the second quarter of FY26 to RM1mil, supported by a 15.5% revenue increase from the facilities segment,” it said.
“AWC’s facilities order book stands at RM465mil, comprising 51.1% of the group’s total backlog, providing multi-year earnings visibility.”
The research house added that the company’s recovery momentum is further supported by concession extensions at revised market rates, a strategic push into high-tech facilities management and the engineering division’s plumbing growth.
“A strengthened group order book of RM910mil and the rail division’s 1.5 times q-o-q order book jump to RM106mil positions the group favourably for FY27, maintaining a cautiously optimistic outlook anchored by stable, service-based recurring income,” it said.
Apex Research has upgraded its recommendation on AWC to “buy” with an unchanged target price of 60 sen, on the back of recent share price weakness and a three-star environmental, social and governance rating.
It noted that at current prices, the stock is trading at 7.8 times forecast FY26 price-to-earnings ratio, offering limited downside with a 1.7% dividend yield.
