SunCon Maintains Confident Outlook On Robust DC Pipeline
Sunway Construction Group Berhad is maintaining a highly confident outlook, setting a new order win target of RM4.5 billion to RM6 billion for the Financial Year 2026 (FY26F), following its achievement of RM5.2 billion in wins for FY25. This optimism is largely underpinned by a robust pipeline of data centre (DC) projects.
According to a recent report by CGS International, SunCon’s tender book remains high at RM18 billion as of January 2026, consistent with its level in November 2025. Significantly, approximately 80% of this tender book is comprised of data centre projects, which now include bids for three new clients. This growth comes despite the company already securing two DC projects with a combined value of approximately RM1 billion in December 2025, one of which was an upsizing project for an existing hyperscaler client.
Data Centre Momentum
SunCon noted that it continues to see visible tenders in the DC space. A key development is that one hyperscaler has opened its maiden tender in Johor, capitalising on a large land bank accumulated in 2023/24. CGS International views SunCon’s FY26 order win target as potentially conservative, anticipating a significant boost from the potential award of a large DC upsizing project for the JHB1XO Building 2, with piling works nearing completion, along with other upsizing works for existing Multinational Corporations (MNCs). These contracts alone could total between RM4 billion and RM4.5 billion.
Diversified Project Pipeline
Beyond data centres, SunCon’s internal pipeline remains promising, with a target to secure RM1 billion in in-house projects for FY26F. These projects are expected to include the expansion of Sunway’s hospitals and a transit-oriented development (TOD) in Johor.In the infrastructure space, the company is also bidding for the Penang LRT Civil and Structural (CMC) Package 2, with tenders set to close by April 2026. Furthermore, SunCon’s precast business reported a strong order book of RM880 million as of December 2025 (up from RM502 million–RM681 million in FY23–FY24), providing solid earnings visibility over the next two to three years and acting as another key growth engine.
Strong Financial Performance and Rating Upgrade
SunCon is slated to release its 4Q25 results on February 23, with expectations for a bumper quarter driven by the early completion and handover of the JHB1XO DC in November 2025.In light of these developments, CGS International has lifted its Earnings Per Share (EPS) forecasts for FY25F, FY26F, and FY27F by 11%, 2%, and 3%, respectively, now assuming new order wins of RM6.5 billion for both FY26F and FY27F.The company remains committed to a 100% dividend payout ratio for FY26F (paid quarterly) unless new opportunities arise, which translates to a projected 5% yield.
SunCon’s robust balance sheet, highlighted by a net cash position of RM1,786 million as of September 2025, is seen as a key strategic advantage for pursuing potential Public-Private Partnership (PPP) projects like MRT 3 and offering favourable working capital terms to its DC clients.CGS International reiterated an Add rating on SunCon, raising its target price (TP) to RM7.30 from the previous level, citing the increased earnings forecasts.
