KUALA LUMPUR (Oct 15): AWC Bhd (KL:AWC) outperformed the broader market on Thursday after the engineering services firm added another contract related to data centres to its books.
The repeat wins are stacking up, Apex Securities said, noting the latest contract worth close to RM40 million is the third given to AWC by Gamuda Bhd (KL:GAMUDA). That cements AWC’s status as an established subcontractor to the Malaysian construction giant, the house said in a note.
“As these projects roll out in phases, follow-on packages at the same sites could follow,” the house said and raised its target price by three sen to RM1.25 while keeping the stock on ‘buy’ call.
AWC rose as much as 1.5 sen to 70.5 sen on Thursday before losing all of the gains shortly after amid broader market decline. The stock was trading at 69 sen at 11.15am as more than two million shares exchanged hands. Market capitalisation was RM232 million based on the last price.
Shares of AWC, which mainly provides facility management for government buildings and automated waste collection systems, have climbed more than 60% from this year’s lows thanks to a strong finish to the latest financial year as well as rising exposure to the rapidly growing data centres.
AWC has three ‘buy’ recommendations from four analysts tracked by Bloomberg, with the sole ‘hold’ call from Berjaya Research. The 12-month average target price stood at 84 sen.
For M+ Global, the latest contract is already within its forecasts as it expands AWC’s total jobs on hand to nearly RM900 million.
“The latest contract win further bolsters engineering earnings visibility and validates our order book replenishment assumptions underpinning the valuation,” the research house added.
On Wednesday, AWC announced that it will be working on building cold water systems, rainwater harvesting, water distribution, fire hydrant and sanitary works at a hyperscale data centre in Port Dickson, Negeri Sembilan.
Preliminary works began on Aug 14, with completion scheduled for Oct 22, 2027.