Malaysia - Infra Projects, Building Materials etc

[winston]

Malaysian construction stocks extend decline on data centre concerns

By John Lai

News reports on the US planning to restrict sales of artificial intelligence chips, which could impact data centres and related project investments in Malaysia.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/740439

[winston]

Construction stocks extend decline sharply as SunCon falls over 10%

By John Lai

The curbs on AI chips should have “little to no impact” on the sector as most of the operators have ongoing developments or those that are planning to build data centres are US-headquartered.

Even after taking office, President-elect Donald Trump “will not take any action to reverse the current restrictions, so there will be no positive catalyst”, Low said.

While the stocks in the sector are still on ‘buy’ calls, investors may be forced to lower their expectations, he added.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/741224

[winston]

Malaysia data centre plays face further risks, JPMorgan warns as it downgrades Sunway Construction, Gamuda

By Anis Hazim

Tightening US chip export restrictions could potentially affect two-thirds of the four-gigawatt data centre capacity planned in Malaysia.

“Downside risks for Malaysia’s data centre pick-and-shovel thematic [are] materialising,”

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/741389

[winston]

Construction – Malaysia Composition Of Collateral Damages

While the US’ AI chip export restrictions has created an unprecedented selldown, this frontloaded pullback may be overdone as we thoroughly assess DC exposure and risks for companies under our coverage.

Beyond the temporary noises, the sector’s growth remains well supported by a huge pipeline of selective domestic infrastructure projects and multi-year high orderbooks.

Maintain OVERWEIGHT. Our top picks are Gamuda, IJM and Kerjaya.

Source: UOBKH

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

[winston]

Reiterating POSITIVE on Malaysia Construction

Maintain POSITIVE, but pricing in some risk

We maintain POSITIVE on the Construction sector, but are now pricing in some risk (shaving TPs) as a result of US’ latest rule on AI data centre location.

We reiterate that our investment thesis on Malaysia Construction remains very much premised on new infra jobs to support the country’s next phase of development, alongside a still robust FDI/DDI landscape.

With a narrowed downside potential to our revised TP, we upgrade SCGB to HOLD (from SELL); maintain BUY on Gamuda, IJM and CMS.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/430941.pdf

[winston]

vested

MIDF says selldown on data centre-related stocks overdone, upgrades SunCon

By Myia S Nair

Upgrade on Sunway Construction Group Berhad (KL:SUNCON) to a “buy”, from “neutral”.

MIDF's upgrade on SunCon reflects the company’s solid project portfolio, ongoing confidence from its data centre clients and a substantial RM10 billion tender pipeline, which positions the company for sustained growth.

Approximately 80% of SunCon’s RM10 billion tender book is dedicated to data centre projects, with the remaining portion comprising external building jobs, warehouses, factories and precast works.

Notably, around RM4 billion of its data centre tenders are in the stage of advanced negotiations, further supporting the research house’s optimistic outlook.

For the current financial year, SunCon’s management has set an order book replenishment target of RM4 billion to RM5 billion, reflecting the company’s focus on maintaining a healthy project pipeline while capitalising on the opportunities within its core data centre business.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/741962

[winston]

‘Significant’ increase in building material prices

Costs of steel, bricks and other building materials, have gone up quite significantly.

The property market had seen an overall improvement throughout the nine months of 2024 with higher transaction volume and value reported

The retail property sub-sector, on the other hand, may experience slower growth following the increase in the cost of living as well as sales and service tax. But this may be mitigated by the hike in the minimum wage as well as the recovery in the tourism sector.

Nonetheless, Henry Butcher noted the oversupply situation in both the office and retail sub-sectors.

The hospitality sub-sector’s outlook is promising on the back of the upcoming Asean Tourism Forum 2025 and Visit Malaysia Year 2026.

Source: The Star

https://www.thestar.com.my/business/bus ... ial-prices

[winston]

Selloff in Malaysian construction stocks overdone — MIDF

By Myia S Nair

Stargate initiative — a US$500 billion (RM2.2 trillion) plan backed by Microsoft and Meta to expand DCs in the US.

MIDF’s top picks for the sector were Gamuda (“buy”, target price: RM5.42), IJM Corp (“buy”, TP: RM3.89), Sunway Construction (“buy”, TP: RM4.46) and Malayan Cement (“buy”, TP: RM6.81).

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/742833

[winston]

Building Materials

“Based on the prices of steel bars quoted through channel checks in the market, the average price declined -4.66% month-on-month in December last year to RM2,443.25 per tonne.

“Additionally, the monthly average price for cement has remained unchanged for the 18th consecutive month since July 2023, holding steady at RM380 per tonne of bulk cement

Source: MIDF

[winston]

Construction stocks on Bursa have room to grow as current valuations unjustified, say analysts

By Yap Yan Qing

RHB's top picks for the sector include Gamuda Bhd (KL:GAMUDA), with a target price (TP) of RM5.83, Sunway Construction Group Bhd (KL:SUNCON), with a TP of RM5.63, and Binastra Corp Bhd (KL:BNASTRA), with a TP of RM2.21.

CGS Research in a note said the market capitalisation between IJM Corporation Bhd (KL:IJM), Gamuda and Sunway Construction had widened to a five-year high, which made IJM's CY2025 PER of 12 times lower than Gamuda's 17 times and Suncon's 18 times.

We like IJM for its strong construction franchise and its synergistic spun piles business," CGS analysts said, as they maintained their 'buy' call on IJM, with a TP of RM3.80. CGS stated that the valuation had not justified IJM's diversified earnings base, with recurring income from tolls and the Kuantan Port.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/746803