SunCon was currently tendering for RM26bil worth of jobs.
KUALA LUMPUR: Sunway Construction Group Bhd
's (SunCon) shares surged on bullish job prospects, driven by an additional RM1.5 billion in works for a data centre project.
The stock opened with a nine sen gain, strengthening by 56 sen or 16.91 per cent to RM3.87 at 9.24 am, with 4.1 million shares traded.
By 9.55 am, trading volume had reached 8.5 million shares, with the price at RM3.69.
Hong Leong Investment Bank reported that SunCon's contract wins for the fiscal year ending in 2024 (FY24) totalled RM3.3 billion, boosting its order book to RM7.9 billion.
"This surpassed the initial target of RM2.5 to RM3.0 billion for FY24, while upside risks to our revised estimate of RM3.6 billion now look substantial," it said in a note.
The investment bank believes SunCon is well-positioned for future tenders with expanded works for the initial phase.
Meanwhile, Kenanga Research increased its FY24-25F profit forecasts for SunCon by 10 per cent and 22 per cent respectively, raising the target price by 22 per cent to RM3.85.
The research firm predicts RM4.5 billion (FY24) and RM4 billion (FY25F) in job wins during this period and upgraded its call on the stock to 'outperform'.
Kenanga Research anticipates a construction sector revival in 2024, driven by projects such as the mass rapid transit (MRT) 3, Pan Borneo Highway Phase 2, and flood mitigation efforts, valued at RM13 billion.
Private sector investment in semiconductor foundries and data centres also supports growth.
"SunCon is eyeing opportunities in data centre construction, MRT3, Penang LRT Mutiara Line packages, and contracts from parent and sister companies," it noted. - Bernama
