Sunway Construction Group Bhd (SunCon) is poised to maintain its robust order-book growth amid sustained investment in data centres (DCs) and a steady flow of new contract opportunities, industry analysts say. Earnings momentum is expected to improve as key data centre projects enter higher billing phases, supplemented by a consistent pipeline of internal contracts from its parent company, Sunway Bhd.
According to Phillip Capital Research, Malaysia’s Data Centre Task Force (DCTF) recently approved an additional five gigawatts of electrical supply capacity for DCs, which could generate around RM40 billion in annual construction demand by the end of 2028. Given SunCon’s dominant presence in the DC segment, the firm is well positioned to capture a significant share of this potential market.
Phillip Capital Research estimates that SunCon will need to secure approximately 18% of this opportunity to meet its target of replenishing RM7 billion in annual orders for 2027 and 2028. The research house considers this reasonable, allowing for some execution variability. SunCon has already secured RM6.9 billion in new contracts year-to-date, achieving 76% of Phillip Capital’s RM9 billion order replenishment target for 2026. The company’s outstanding order book stood at RM10.5 billion, which includes three major DC projects with expected escalated billings starting in the fourth quarter of 2026.
Phillip Capital anticipates that SunCon’s third-quarter earnings for 2026 will remain relatively stable compared to the previous quarter, with near-term growth opportunities arising from projects in Sedenak and remaining contracts in Bukit Serendah. The group also benefits from internal jobs awarded by Sunway Group, with RM400 million secured against a RM1 billion target for 2026. Among these internal projects is the Sunway Medical Centre Seremban Sentral hospital, projected to be worth between RM200 million and RM300 million.
The brokerage reaffirmed a “buy” rating on SunCon with a 12-month target price of RM9.32, based on a 22 times price-to-earnings ratio for estimated 2027 earnings per share.
Meanwhile, UOB Kay Hian Research upgraded SunCon to a “buy” rating, maintaining a target price of RM8.44, which is based on a 21.6 times forecast 2027 price-to-earnings ratio. The upgrade followed a recent share price correction, while the company’s implied dividend yield, estimated at 4.8% to 6.5% for 2026 to 2027 under a full payout assumption, remained attractive.
UOB Kay Hian noted that SunCon’s RM10.5 billion order book represents a cover ratio of 1.7 times annual revenue, with a tender pipeline surpassing RM14.2 billion. The research house expressed confidence in SunCon’s ability to meet its RM7 billion to RM9 billion order replenishment goals in 2026, supported primarily by DC-related contracts. It also highlighted prospects for earnings growth ranging from 8% to 29% between 2026 and 2028, driven by potential DC contracts worth RM4 billion to RM6 billion, residential projects tied to the Rapid Transit System’s transit-oriented development at Bukit Chagar in Johor (valued at RM350 million to RM500 million), RM2 billion to RM3 billion of internal Sunway projects, and roughly RM1 billion in precast orders.
Additionally, SunCon may pursue civil works for the mass rapid transit line three (MRT3), supported by its track record and an expected landbank acquisition completion by year-end 2026. Data centre projects currently account for approximately 70% of the company’s outstanding order book and more than 80% of its tender opportunities. The firm is bidding for several DC projects that would total between RM11 billion and RM13 billion based on IT load exceeding 700 megawatts, with potential awards expected during 2026 and 2027.
An analyst commenting on SunCon’s outlook said the company’s strong position in the expanding data centre market and a sizable order book provide enhanced earnings visibility. Beyond DCs, the analyst noted the group’s pipeline of infrastructure, property, and internal projects as additional supports for ongoing order replenishment and earnings growth in the medium term.