KUALA LUMPUR (May 19): Sunway Construction Group Bhd (KL:SUNCON) is expected to continue securing data centre (DC)-related jobs, with potential wins including mechanical, electrical, and plumbing packages for the JHB01 and Shell 2 multinational corporation DCs, as well as remaining phases of the JHB1X0 project in Sedenak, said RHB Investment Bank Bhd.
In a research note, RHB added that the group could also secure works for the potential roll-out of Sunway Healthcare Holdings Bhd’s (KL:SUNMED) Seremban Sentral Hospital project in the second half of the financial year ending Dec 31, 2026 (2HFY2026).
Despite the positive outlook, analysts said Sunway Construction’s earnings momentum may soften in the second quarter ending June 30, 2026 (2QFY2026) and 3QFY2026 due to margin normalisation and project completion timing, particularly for its JHB1X0 DC project.
RHB noted that the JHB1X0 project, valued at RM4.1 billion, was 98.7% completed as at end-March, which could weigh on sequential earnings performance in the coming quarters.
However, it expects stronger progress billings towards 4QFY2026 as newer DC projects awarded in FY2025 ramp up.
The research house added that Sunway Construction may also complete certain DC jobs ahead of schedule, including the Project Service Request multinational corporation DC project, which was already 84% completed as at end-1QFY2026 despite its targeted completion date in 2QFY2027.
The outlook follows Sunway Construction’s strong 1QFY2026, where net profit rose 56.4% year-on-year to RM118.41 million, supported by contributions across its operating segments. But its revenue slipped by 27% to RM1.02 billion due to a drop in construction revenue.
Analysts remained positive on the group, citing its growing DC exposure and expanding order book, which stood at RM8.2 billion as at end-March.
In a separate note, Phillip Capital upgraded Sunway Construction to ‘buy’ with a higher target price of RM7.83 from RM5.50 after raising its FY2026-FY2027 earnings forecasts by 31%-35%, driven by higher assumed order book replenishment.
“With year-to-date new wins amounting to RM3.6 billion, Sunway Construction is on track to achieve its 2026 replenishment guidance of RM6 billion,” said Phillip Capital.
Meanwhile, RHB raised its target price to RM8.33 after rolling forward its valuation base year to FY2027, while maintaining its earnings forecasts as the group’s quarterly results came in broadly within expectations.
Bloomberg data showed 16 analysts on Sunway Construction’s counter, with 14 ‘buy’ calls, two ‘hold’ ratings, and a 12-month average target price of RM7.91. Sunway Construction shares closed 20 sen or 2.82% higher at RM7.30 on Tuesday.
AskEdge data showed the group trading at a price-earnings ratio of 26 times, which is higher than most peers and also on the higher end compared to its historical valuation in recent years. Sunway Construction’s price-to-net asset value ratio is at 12 multiples, which is the highest among its peers and at its highest level in recent years.