PETALING JAYA: Sunway Construction Group Bhd
(SunCon) has clinched a RM1.02bil data centre (DC) contract in Johor from a US-headquartered multinational technology corporation.
In a filing with Bursa Malaysia, SunCon said its wholly-owned subsidiary, Sunway Construction Sdn Bhd, had accepted the letter of award (LoA) for mechanical, electrical and plumbing fit-out works.
The group said the LoA also serves as the instruction to commence the works, which are targeted to be completed by the fourth quarter of 2027.
SunCon said the new project is not expected to have any immediate material effect on the earnings per share, net assets per share or gearing for the financial year ending Dec 31, 2026 (FY26).
However, the contract is expected to contribute positively to the group’s earnings from FY26 onwards.
As at Aug 3, 2026, SunCon had secured RM5.8bil in new orders for the current financial year, including the latest contract. Its outstanding order book currently stands at RM10.4bil.
UOB Kay Hian (UOBKH) Research said in a recent report that SunCon is well positioned for another year of strong earnings growth, supported by a record order book, robust DC construction demand and a steady pipeline of internal jobs from parent Sunway Bhd.
The brokerage said SunCon’s valuation remains reasonable, underpinned by an attractive dividend yield and potential upside from improved capital management.
“Suncon is in a net cash position of about RM1.2bil currently, reflecting an improving trend over the last two years following better earnings and improved cash flow conversion,” UOBKH Research said.
Alongside year-on-year earnings growth, the brokerage expects a dividend payout ratio of 100% to 143% between 2026 and 2028, implying an attractive prospective yield of 4.8% to 6.5%.
“We also do not rule out further special dividends as the group has sufficient room for better capital management,” it added.
The research house expects SunCon to replenish about RM1bil of its order book from parent Sunway Bhd in 2026.
This is expected to come mainly from potential internal projects.
These include Sunway Medical’s hospital expansion, Sunway’s planned property launches worth RM2bil to RM3bil annually over the coming years and capacity expansion at its medical centres, as well as renovation and refurbishment works at its existing hotels and malls.
UOBKH Research believes these internal projects will be doled out by Sunway in stages between 2026 and 2027, with earnings recognised progressively over the period.
