PETALING JAYA: The expected profit before tax (PBT) margins for the recent back-to-back contract wins for data centre (DC) projects by Gamuda Bhd
and Sunway Construction Group Bhd (SunCon) could be about 8% for both contractors.
Assuming a 8% profit before tax PBT margin, TA Research estimates this contract to contribute about RM137.6mil PBT over the contract period for Gamuda and RM140mil for SunCon.
Based on its channel checks, these contracts are awarded under a cost plus model rather than a fixed cost model.
“This effectively allows Gamuda and SunCon to pass through fluctuations in key input costs, particularly building materials and energy, thereby reducing the risk of margin compression amid the current volatile cost environment driven by global uncertainties,” TA Research said.
The research house maintained its “hold” call on SunCon with an unchanged target price of RM7.28 a share, pegging to the same price to earnings multiple of 21 times of its 2027 earnings per share.
“Given that the new job is within our new job win assumptions, we make no changes to our earnings forecasts.
“We reiterate our ‘buy’ call on Gamuda with the same sum-of-parts derived target price at RM5.62 a share,” TA Research added.
The research house has also retained its “overweight” stand on the construction sector.
Gamuda secured a RM1.72bil contract from a US-headquartered multinational technology company to construct a hyperscale DC in Port Dickson, Negri Sembilan.
Works will begin in the second quarter of financial year 2026 (2Q26), with completion expected in 1Q28.
Similarly, SunCon clinched a RM1.75bil contract from an international hyperscaler for a hyperscale DC project in Bandar Serendah, Selangor, with commencement expected in 3Q26 and completion by 3Q28.
“Including the latest DC job win, this brings Gamuda’s total unbilled order book to RM45.5bil, placing the group firmly on track of achieving management guidance of a RM50bil to 55bil total outstanding order book by end-2026,” TA Research said.
This unbilled order book translates into a strong 3.6 times cover of its FY25 construction segment revenue, ensuring its strong near-term earnings visibility, it added.
The latest win marks the group’s second DC contract secured in FY26, bringing cumulative DC job wins year-to-date (y-t-d) to RM3.8bil.
“This accounts for 84% of its Malaysian total new job wins, highlighting the group’s growing positioning within the high-growth DC construction space.
For SunCon, including the latest win, its FY26 y-t-d new job win is about RM3bil and this lifts its total unbilled order book to RM8.7bil, representing a healthy 1.6 times cover of its FY25 revenue.
“At the current order book replenishment rate, it achieves approximately 50% of our full-year new job win assumptions of RM6bil,” TA Research said.
