Sunway Construction

[winston]

not vested

The more resilient contractor

DC pipeline is intact with higher pricing now;

FY26F RM6bn order target intact and we expect some DC awards in 2Q26F.

Managing the higher cost well – 50% of orderbook are cost past through.

We reiterate our Add call with a GGM-based TP of RM7.90.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 4F4061BA4C

[winston]

5263 SUNCON (BUY)
New client in the bag

SunCon secured a RM1.75bn construction contract from an international hyperscaler covering DC core and shell works, campus infrastructures and MEP fit-out in Bandar Serendah – lifting its YTD win to RM3bn and outstanding orderbook to RM8.7bn.

We increase our replenishment assumption for FY26 to RM8bn (from RM6bn), backed by sizable conversion and upsizing pipeline from existing clients and Parent Co.

We raise our FY26/27f forecasts by 26%/15% and maintain BUY call with a higher TP of RM9.10 (23x FY27 PE).

Source: HLIB

[winston]

not vested

A Bright Summer

Following a virtual meeting with management last week, we maintain our optimistic outlook on Suncon in 2026.

The group’s resilient orderbook replenishment and strong DC tender pipelines remain as key catalysts.

From a capital management perspective, we also like Suncon for its Implied dividend yield of 5.0-5.1% for 2026-27, based on our 100% dividend payout assumptions.

Maintain BUY with a raised target price of RM7.65, which implies 22x 2027F PE (+1SD above five-year mean of 18x).

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

5263 SUNCON (BUY)
Sizable tenders ripe for conversion

SunCon’s YTD wins of RM3.4bn brought its outstanding orderbook to RM9.1bn (1.7x FY25 cover).

Several high certainty conversions of DC bids, among its sizable tenderbook of c.RM15-16bn, is expected to drive its FY26 contract wins to our assumption of RM8bn.

We expect 1H26 margins to remain elevated, supported by projects approaching book closure with upside from margin recalibration.

FY26/27 forecast is slightly adjusted by +0.1%/+0.5% post annual report update.

Also, we introduce FY28f earnings at RM402m.

Maintain BUY rating with an unchanged TP of RM9.10.

Source: HLIB

[winston]

not vested

5263 SUNCON (BUY)
Surprise payday

SunCon reported 1QFY26 core PATAMI of RM114.3m (-26% QoQ, +39% YoY), which came in within both our and consensus expectations at 27% of full year forecast.

Declared first interim DPS of 7.6 sen and special DPS of 15.2 sen, bringing the total divvy tally to 22.8 sen (ex-date: 9 Jun).

Core PATAMI rose 39% YoY, driven by robust margin expansion due to an upward recalibration on its key DC projects.

SunCon’s orderbook stands at RM8.2bn (1.5x cover on FY25 revenue).

Maintain our forecasts and BUY rating with an unchanged TP of RM9.10.

Source: HLIB

[winston]

not vested

The chosen one for the second coming of the data centre wave

Maintain BUY call and raise TP to MYR8.28 (+6%)

Margins continue to positively surprise.

SCGB now expects sustainable EBIT margins of 8-10% (from 7-8%), supported by cost savings, easing building material costs and operating leverage.

We raise our earnings estimates by 6-19%, lift our TP to MYR8.28 (from MYR7.83) and reiterate our BUY call.

Furthermore, potential upgrades to its MYR6.0b job win target could provide further upside.

While waiting for capital appreciation, investors could be rewarded with at least 4% dividend yield p.a. (100% DPR).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/545494.pdf

[winston]

not vested

5263 SUNCON (BUY)
Orderbook crosses RM10bn mark

SunCon has secured RM1.02bn contract from a US-MNC to undertake the MEP fit-out works for a data centre located in Johor.

In addition to this RM1bn job win, the group has also bagged another RM600m worth of contracts comprising RM400m for Sunway’s hospital construction in Iskandar Puteri and various VOs.

All in, SunCon YTD job win tally amounts to RM5.8bn, lifting its outstanding orderbook to RM10.4bn (2.0x FY25 revenue).

Maintain our forecasts and BUY rating with unchanged TP of RM9.10.

Source: HLIB