PETALING JAYA: Analysts say Sunway Construction Group Bhd
(SunCon) has further room to secure new orders despite already surpassing its full-year replenishment target.
This follows SunCon’s latest RM1.04bil mechanical, electrical and plumbing fit-out award, which lifted its year-to-date (YTD) job wins for financial year 2026 (FY26) to RM6.85bil, exceeding its RM6bil replenishment target by about 14%.
BIMB Research has raised its FY26 order book replenishment assumption to RM8bil.
“This is underpinned by SunCon’s RM14bil tender book, of which the bulk is data centre or DC-related,” the research house noted in a report yesterday.
Similarly, MBSB Research, sees scope for FY26 job wins to reach between RM7bil and RM8bil.
It said around 90% of SunCon’s tender book as at August comprised DC projects, mainly follow-on phases from existing clients and split roughly equally between Johor and the Klang Valley.
“We see further order book upside from the potential award of Serendah Phase 2, estimated at RM1bil to RM2bil, alongside around RM1bil of internal hospital and transit-oriented development projects.”
Phillip Capital Research also sees “further upside” for job wins, with the DC-related tender pipeline comprising opportunities from six existing clients and one new client.
Kenanga Research was more bullish, raising its FY26 and FY27 job win assumptions to RM9bil and RM7bil from RM7bil and RM6bil previously.
Of these, RM7bil and RM5bil are expected to come from DC projects, respectively.
The research house said SunCon had secured five DC contracts worth a combined RM5.62bil YTD, making it a key beneficiary of the second wave of the DC boom.
“For the same period, Gamuda Bhd won two contracts worth RM3.43bil, while IJM Corp Bhd secured one contract worth RM658mil.”
Following the latest win, SunCon’s outstanding order book is estimated to have risen to an all-time high of RM10.5bil.
TA Research said this was equivalent to 2.1 times its FY25 construction revenue, providing solid earnings visibility over the near term.
The research house noted that DC-related projects now account for more than 95% of SunCon’s YTD job wins, reinforcing its position as a key beneficiary of Malaysia’s expanding DC investment cycle.
“We believe SunCon remains well positioned to benefit from the country’s rapidly expanding DC investment pipeline, backed by its execution track record and growing presence across both DC construction and mechanical and electrical-related packages,” it added.
Meanwhile, SunCon, in its second-quarter (2Q26) results filing, raised the 2026 job-win target to RM7bil to RM9bil from RM6bil previously, following the strong order intake YTD.
This comes as SunCon’s net profit for 2Q26 rose 23.5% to RM103.59mil from RM83.89mil a year earlier, despite revenue falling 31.1% to RM1.02bil from RM1.48bil.
The lower revenue was mainly due to the construction segment. Construction revenue fell to RM941.6mil in 2Q26 from RM1.43bil, as the previous corresponding quarter had benefited from accelerated progress at several DC projects.
However, the segment’s profit before tax rose to RM124.8mil for the quarter from RM121.4mil in 2Q25, supported by a more favourable project mix, including a higher proportion of advanced technology facilities (ATF) projects.
The precast segment recorded a pre-tax profit of RM6.5mil in 2Q26, compared with RM1.2mil a year earlier, on a revenue of RM76.1mil versus RM43.4mil previously.
For the first half of 2026 (1H26), SunCon’s revenue fell 29.1% to RM2.04bil from RM2.88bil a year earlier, while net profit rose 39.1% to RM222mil from RM159.61mil.
SunCon said the construction segment delivered its strongest six-month profit margin on record, supported by a more favourable project mix, accelerated progress on certain projects and the reversal of provisions following the recovery of receivables.
The group declared a dividend of four sen per share for 2Q26, compared with 7.25 sen a year earlier.
Still, its cumulative dividend for 1H26 stood at 26.8 sen per share, more than double the 12.25 sen declared in 1H25.
Looking ahead, SunCon said it remained “optimistic” on its performance for the financial year ending Dec 31, 2026, supported by its healthy order book, strong financial position and execution track record.
“Collectively, the group’s diversified portfolio across ATF, in-house and public infrastructure projects positions SunCon on a sustainable growth trajectory,” the company said.
TA Research has maintained a “hold” call on the stock, after raising its target price (TP) to RM8.52 from RM8.26 previously.
BIMB Research also raised the TP to RM9.62 from RM8.28 and maintained a “buy” call, while Kenanga Research lifted the TP to RM9.70 from RM8.40 with an “outperform” call.
MBSB Research maintained a “buy” call and RM9.18 TP, while Phillip Capital Research retained a “hold” call with an unchanged TP of RM7.83.
Yesterday, SunCon closed up 18 sen or 2.3% at RM8.08 each share, valuing the company at RM10.76bil.
