SunCon’s order book for construction works now stands at RM7.8bil, of which 52% or RM4.6bil is for five data centre jobs.
PETALING JAYA: Sunway Construction Group Bhd
(SunCon) is likely to build on its existing order book for data centres construction contract awards with new awards and via the expansion of secured projects.
Phillip Capital Research stated the company can build on the data centre tailwinds with four gigawatts of new build capacity worth some RM40bil in contract work awards anticipated over the next three years to come.
SunCon’s order book for construction works now stands at RM7.8bil, of which 52% or RM4.6bil is for five data centre jobs. The research house sees it gaining more deals in this space.
“Nearly all its clients plan for further expansions, positioning SunCon favourably for future contract upsizing.
“SunCon is also actively bidding for four data centre projects with potential new clients, with one-to-two tenders likely to be finalised by the end of 2024,” Phillip Capital stated in its latest update report on SunCon.
SunCon’s existing data centre jobs include the RM289mil K2 facility, of which RM65mil worth of work is outstanding and expected to be completed by the end of this year, as well as two early contractor involvement (ECI) packages worth RM60mil, also due to be completed this year.
Its major data centre contract is the JHBX10 facility in Sedenak (Johor) worth RM3.55bil due to be completed by the first quarter of 2026 (1Q26) and the project service request (PSR) for an undisclosed US multinational worth RM748mil, that is scheduled for completion by end 2024.“Further expansion or upsizing opportunities from the Sedenak data centre’s end client may materialise in the second half of 2025 (2H25).
“The PSR work package is in the early stages, but we expect progress to accelerate in 2H25.
“The ECI work packages could convert into full-scale design and build contracts with a combined value of RM1-1.5bil in early 2025,” the research house stated.
Phillip Capital has thus upgraded SunCon to a “hold” (from sell) and raised its target price to RM4.50 a share (from RM3.60 earlier) after raising its 2025 to 2026 earnings per share forecast for SunCon by 10% to 13%, as well as factoring in quicker progress recognition from ongoing data centre projects.
It kept its annual order wins assumption for SunCon at RM4.5bil to RM5bil, noting risks to the call include slower-than-expected order book recognition and margin pressures.
