KUALA LUMPUR (July 8): More than RM14 billion worth of public infrastructure projects could be awarded in the second half of 2026 if implementation proceeds as expected, giving Malaysia’s construction sector a lift, BIMB Securities Research said.
The potential awards include the Penang Light Rail Transit Packages 2 and 3, worth an estimated RM7 billion to RM8 billion; the RM4 billion Perak-Penang Water Supply Scheme; and the RM3.7 billion Sungai Langat 2 Phase 2 Water Treatment Plant Packages 1 and 2.
“Collectively, these projects represent more than RM14 billion of potential contract opportunities and should provide a meaningful boost to domestic order book replenishment should awards proceed as anticipated,” BIMB Securities said in a sector update.
The research house maintained its “overweight” call on the construction sector, saying private-sector projects, particularly data centres, continue to drive contract replenishment and earnings visibility.
Still, BIMB Securities said public infrastructure rollout remains relatively subdued amid election-related uncertainty, with larger projects likely to face further delays due to fiscal and political uncertainties.
It said the Johor Elevated Autonomous Rapid Transit (e-ART) project, initially estimated at about RM10 billion, could be scaled down to RM6 billion to RM7 billion after scope optimisation and negotiations. The RM31 billion Mass Rapid Transit 3 (MRT3) project is also expected to face further deferments.
BIMB Securities said the Johor Economic Transformation Plan remains a long-term catalyst for the sector, provided there is policy continuity after the upcoming Johor state election.
The plan includes water infrastructure projects to support data centre and heavy manufacturing investments, the e-ART system to ease congestion in Johor Bahru, and the proposed Lebuhraya Pantai Timur 4 (LPT4) highway to improve connectivity across eastern Johor.
Within this theme, BIMB Securities identified Kimlun Corp Bhd (KL:KIMLUN) as an under-appreciated beneficiary, although the stock is not rated by the research house.
Kimlun is the only major Bursa Malaysia-listed contractor headquartered in Johor Bahru and has in-house precast manufacturing capabilities. The group has also supplied precast components for Singapore’s MRT network and the Deep Tunnel Sewerage System.
BIMB Securities said Kimlun could be well positioned to secure selected subpackages under the Johor e-ART, LPT4 and future water infrastructure projects, although these opportunities are unlikely to contribute to earnings immediately.