Sunway Construction

[winston]

not vested

Another nice dividend surprise moderates slowing job wins

Downgrade to HOLD and cut TP to MYR5.63 (-16%) SCGB’s earnings were within our and consensus expectations but dividends outperformed again on a 23sen special DPS.

That said, new job wins in 3Q25 underwhelmed.

Thus, we cut our earnings estimates by 3-22%.

Ascribing an unchanged 24x FY26E PER (+1 SD to long term mean), we cut our TP to MYR5.63 from MYR6.72 and downgrade SCGB to HOLD from BUY.

Separately, our proprietary ESG score for SCGB is trimmed to 70/100 from 72/100 on higher GHG emissions and energy consumed.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/499661.pdf

[winston]

not vested

3Q25: Within Expectations; Positive Dividend Surprise

3Q25 earnings in-line with our expectations but surpassed consensus’, making up 76% and 85% of ours and consensus’ full-year estimates.

Positive surprise on special dividends, bringing 3Q25 dividends to 29.25 sen and 9M25 dividends to 41.5 sen, which implies lush dividend yield of 7.2%.

Maintain HOLD and target price of RM6.27, which implies 22x 2026F PE (+1SD above five-year mean of 18x).

Source: UOBKH

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

[winston]

Another gift before Christmas

Maintain HOLD call and MYR5.63 TP Fresh after SCGB secured its first major job win of MYR570m after a dry spell of almost 7 months, it secured another major job win of MYR386m.

YTD job wins stand at MYR4.9b or 98% of our FY estimate and orderbook stands at MYR6.4b.

SCGB hopes to bag 1 more data centre job and 1 more internal job before FY25E is through.

We maintain our earnings estimates, HOLD call and MYR5.63 TP on 24x FY26E P/E pending more job wins.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/505182.pdf

[winston]

not vested

Chasing The Golden Hours

At a virtual meeting with management yesterday, we highlighted our optimism on Suncon’s 2026 outlook.

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

Implied dividend yield of 5.3-5.5% for 2026-27 is also appealing, based on our 100% dividend payout assumptions.

We also see room for further capital management upside.

Maintain BUY and target price of RM6.66, which implies 22x 2026F PE (+1SD above five-year mean of 18x).

Source: UOBKH

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

[winston]

not vested

Sunway Construction Group Bhd ADD, TP RM7.30, RM5.96 close

Suncon has the most concentrated exposure in the DC space.

We expect it to capitalise further on this in CY27F with a maiden DC win for Pearl Computing and it is our top DC pick in Malaysia construction sector.

In our Scenario 1 with two DC wins, this may lift FY26-FY27F by 10-15% and FV to RM8.00.

Source: CGS

[winston]

not vested

SunCon poised for record-high earnings

“We expect 4Q25 core earnings to be between RM70mil and RM80mil (which translates into year-on-year growth growth of 6.4% to 21.6%).

“Hence, we envisage a full-year FY25 core profit of RM340mil to RM350mil – a record high.

We view the strength in 4Q25 to come from accelerated progress billings, mainly from its data centre projects.”

RHB noted that as of the end of September 2025, the JHB1X0 data centre project (plus tenant improvement works) worth RM4.1bil in Johor saw progress reaching 96.7% and should be completed by end-4Q25.

“Aside from that, the PSR-MNC data centre job worth RM778mil (awarded in March 2024 and targeted for completion in 1Q27) was 54% completed as of end-3Q25.

“We observed that in 3Q25, 24.5% of the project was recognised between 2Q25 and 3Q25 versus previous periods with recognition levels below 10%.”

RHB said it is not discounting the possibility of the PSR MNC job’s individual recognition in 4Q25 to be circa 20% (bringing the cumulative completion as of end-4Q25 to circa 74%).

The research house said total new job wins for FY25 stood at RM5.2bil (versus its initial expectations of RM6bil) with around 50% coming from data centre contracts.

RHB said other potential upcoming wins may stem from Sunway Bhd’s related property projects such as Seremban Sentral, coupled with potential expansion works for JHB1X0 DC in Sedenak (Johor), which has a total planned capacity of 200 to 300 MW.

The research house said it is reducing SunCon’s FY25 earnings forecast by 2.9% to reflect the actual FY25 wins.

Source: The Star

https://www.thestar.com.my/business/bus ... h-earnings

[winston]

not vested

4Q25: Significantly Beats Expectations

4Q25 earnings surpassed expectations, making up 119% and 124% of our and consensus full-year estimates, respectively.

Positive surprise on dividends, bringing 2025 dividends to 50.5 sen which implies a lush dividend yield of 8.0%.

Maintain BUY with higher target price of RM7.40, which implies 22x 2026F PE (+1SD above five-year mean of 18x) on revised higher earnings.

Source: UOBKH

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

[winston]

not vested

Awaiting upsizing of sizeable DC contracts

4Q25 results a strong beat, lifted by handing over of Sedenak DC contract.

It set an FY26F new order win target of RM6bn (vs. RM4.5bn-6bn); needs to convert upsizing of DC contracts to ensure earnings continuity in FY26F.

We reiterate Add, raise FY26-FY27F EPS and lift TP to RM7.90.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 049E73C4FC

[winston]

not vested

5263 SUNCON (BUY)
Strong close to an exceptional year

SunCon reported FY25 earnings of RM425.6m, more than doubling its previous record high since listing.

Earnings beat on stronger than expected profitability for DC projects.

DPS of 9.0 sen was declared for the quarter bringing FY25 DPS to 50.5 sen.

Tenders remain sizable at RM17.5bn, backed by >700MW of DC tenders.

We expect SunCon to capitalise on competitor’s hiccup in the DC space.

Recalibrate FY26f/27f core PATAMI forecasts by -2.2%/+13.5%.

Maintain BUY with higher TP of RM7.00.

Source: HLIB

[winston]

not vested

Mapping out 2026 earnings growth potential

Upgrade to BUY with higher TP of MYR7.83 (+39%)

SCGB is targeting MYR6.0b in FY26E job wins, largely from data centres.

Margin pressure from rising building material prices is building but can be moderated by bad debt recovery, cost savings and partial cost pass throughs.

We raise our FY26E and FY27E core net profit by 29% and 19% and introduce FY28E core net profit.

Rolling forward our valuation base year to FY27E from FY26E and ascribing an unchanged 24x, we raise our TP to MYR7.83 from MYR5.63. Upgrade to BUY from HOLD.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/526032.pdf