Sunway Construction Group Bhd (SunCon) is on course to exceed its full-year job win target, bolstered by robust momentum in securing high-value data centre projects. Maybank Investment Bank Research (Maybank IB Research) has raised its forecast for SunCon’s new contract wins in FY25 to RM8 billion, significantly above the group’s original target of RM4.5 billion to RM6 billion.
To date, SunCon has secured RM3.5 billion in new projects. The group is now eyeing additional data centre contracts valued between RM1 billion and RM1.2 billion, with at least one expected to be confirmed in the third quarter of FY25. Discussions are reportedly underway with multiple clients, including Pearl Computing and three other potential partners, one of which is a Nasdaq-listed company.
These developments, according to Maybank IB Research, mark a major pivot toward technology-driven infrastructure demand and place SunCon in a strong position to capitalise on this trend. Data centre-related work now dominates the group’s tender pipeline.
Internal projects from parent company Sunway Bhd are also poised to contribute to SunCon’s earnings trajectory. Two major healthcare facilities — Sunway Medical Centre Putrajaya and Sunway Medical Iskandar Puteri — are slated for launch this year. Each hospital will have a capacity of 300 beds and is estimated to contribute approximately RM500 million in contract value, based on a projected capital expenditure of RM1.5 million to RM1.6 million per bed.
Over the longer term, SunCon anticipates further internal contract awards, including jobs linked to Sunway’s rapid transit system-oriented developments and the Seremban Sentral project.
On the back of these positive catalysts, Maybank IB has revised its earnings estimates for SunCon upwards by 20% to 30% for FY25 through FY27. The research house has reaffirmed its “buy” recommendation on the stock, raising its target price to RM6.72.
Affin Hwang Investment Bank Research echoed this positive outlook, projecting a 27% compound annual earnings growth rate from 2025 to 2027, driven predominantly by the group’s data centre order book, which comprises over 80% of its active tenders.
The recovery of SunCon’s precast segment is also anticipated to support earnings. This division experienced a 33% drop in revenue in FY24 but is expected to rebound, driven by Singapore’s Housing and Development Board’s plan to launch 500,000 new flats. Nonetheless, the segment’s contribution to total revenue is likely to remain modest at 5% to 6%, given the dominant role of the construction division.
Despite the strong growth trajectory, Affin Hwang has downgraded its call on SunCon to “hold” from “buy”, citing valuation concerns. The firm maintained its target price at RM5.90 and noted that the current share price may already reflect much of the positive outlook.
-The Star
