KUALA LUMPUR (Nov 1): Sunway Construction Group Bhd (KL:SUNCON) shares may have limited further upside following their recent rally, even as the company’s pipeline of contracts appears robust, analysts said.
The company is now overwhelmed with data centre jobs that now make up nearly half of its total order book totalling RM7.8 billion, including tenant improvement works announced on Wednesday for the JHB1X0 data centre project in the Sedenak Tech Park in Johor.
The strong run-up in Sunway Construction shares indicates “that the positives have been priced in”, said MIDF Amanah Investment Bank, which kept the stock on a ‘neutral’ call, with a target price of RM4.46.
Sunway Construction was relatively unchanged on Friday at RM4.43.
Shares of Sunway Construction have already more than doubled year-to-date, tracking strong gains in the sector fuelled by optimism about the government's roll-out of major infrastructure projects. The stock has also benefited from a slew of news of highly lucrative jobs to build data centres.
There are now seven ‘buy’, seven ‘hold’ and two ‘sell’ calls for the stock from research houses. The consensus 12-month target price stands at RM4.77, according to Bloomberg.
TA Securities on Friday maintained its ‘buy’ call and raised its target price to RM6.68, the highest among all those covering Sunway Construction. The house raised its earnings estimates by 8.5% for the financial year ending Dec 31, 2025 (FY2025) and 10.1% for FY2026, noting that the company has solid earnings visibility up to FY2027.
“We continue to like the stock,” TA Securities said, citing its “strong position” as a bidder for mega infrastructure projects, strong earnings visibility, and its prominent position in securing more jobs to build advanced technology facilities.
On Wednesday, Sunway Construction announced that it had accepted an additional RM265 million works on the JHB1X0 data centre, lifting the total contract value to RM3.5 billion from the project alone.