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New Straits Times
6 days ago
- Business
- New Straits Times
SunCon clears the air on MACC probe at investor briefing, maintains strong outlook
KUALA LUMPUR: Sunway Construction Group Bhd (SunCon) has dismissed concerns over its long-term prospects following the recent remand of one of its employees by the Malaysian Anti-Corruption Commission (MACC) over subcontractor-related dealings. In an investor briefing led by group managing director Liew Kok Wing, SunCon affirmed that the incident poses no threat to its long-term prospects or operational integrity, stressing the incident is isolated and does not implicate the company, Maybank Investment Bank (Maybank IB) said in a note. According to Maybank IB, the group assured investors and clients that the probe involves only a single contract manager and a few subcontractors, not the company as a whole. The employee has since been suspended and will be terminated after the remand period. SunCon, which is involved in several high-value data centre projects in the Klang Valley and Johor, has been in active communication with clients to explain the situation. So far, responses have been supportive, and the group does not expect any disruption to its ongoing projects, Maybank IB said. To further bolster investor confidence, SunCon highlighted its recent Anti-Bribery Management Systems (ABMS) certification, awarded just two months ago following an audit by SIRIM and external parties. "It believes its standard operating procedures (SOPs) are sound and the aforementioned case involved just that one employee. SCGB revealed that it conducts subcontracting tenders electronically and only awards to local companies that offer the lowest bid," Maybank IB said. The investment bank said that while acknowledging some reputational impact, SunCon believes the long-term outlook remains intact. "At the very least, it does not expect its existing projects to be affected. SunCon stated that its clients have been receptive of its explanation. Given SunCon's explanation, we believe there should not be too many negative repercussions over time once the case is settled, though there may be near-term distractions," Maybank IB said. Maybank IB reiterated its "BUY" call on SunCon, maintaining a target price of RM6.72 based on 24x fiscal year 2026 earnings, supported by annual job win expectations of RM7 billion. Similarly, Hong Leong Investment Bank (HLIB) echoed a bullish stance, reaffirming its "Buy" rating with a target price of RM6.70. HLIB noted that SunCon's management has assured the RM180 million work scope under the employee's purview can be absorbed internally if subcontractor changes are required. Technically, SunCon shares formed a Hammer candlestick pattern at RM5.49 on July 21, after sliding from an all-time high of RM6.27 on June 11 to a recent low of RM4.93 - a signal that a near-term rebound may be on the horizon. Despite the volatility, SunCon has delivered strong year-to-date performance, trading 12.96 per cent above its January opening price of RM4.63, with a trading range between RM3.29 and RM6.16 - reflecting both investor optimism and broader market swings. In a separate development, the Employees Provident Fund (EPF) - a key shareholder since 2018 - disposed of 20 million shares on July 14 via Citigroup Nominees, trimming its stake to 4.27 per cent and exiting its position as a substantial shareholder. SunCon, listed on Bursa Malaysia in July 2015, continues to demonstrate resilience amid market headwinds - underpinned by strong fundamentals, a solid project pipeline, and growing confidence from both clients and analysts.
New Straits Times
22-07-2025
- Business
- New Straits Times
SunCon brushes off corruption concerns, reaffirms growth outlook
KUALA LUMPUR: Sunway Construction Group Bhd (SunCon) has acted swiftly to reassure investors and clients, dismissing concerns over its long-term prospects following the remand of an employee by the Malaysian Anti-Corruption Commission (MACC) over subcontractor-related dealings. In an investor briefing led by group managing director Liew Kok Wing, SunCon firmly dismissed concerns over its operational integrity and future prospects. The company clarified that the case involves a single contract manager and a few subcontractors – not the company itself. It stressed that the incident is isolated and that SunCon is fully cooperating with the authorities, according to a research note by Maybank Investment Bank (Maybank IB). The employee has been suspended and will be terminated after the remand period, SunCon confirmed. SunCon also reported that it has been in active communication with clients to explain the situation. So far, responses have been supportive, and the group does not expect any disruption to its ongoing projects, Maybank IB said. To further strengthen investor confidence, SunCon highlighted that it obtained Anti-Bribery Management Systems (ABMS) certification just two months ago. The certification was audited by SIRIM and external parties, reinforcing the group's governance credentials. It also reaffirmed that subcontracting tenders are conducted electronically and awarded strictly based on the lowest bid among local companies. "It believes its standard operating procedures (SOPs) are sound and the aforementioned case involved just that 1 employee. SCGB revealed that it conducts subcontracting tenders electronically and only awards to local companies that offer the lowest bid," Maybank IB said. While acknowledging some reputational impact, SunCon believes the long-term outlook remains intact. "At the very least, it does not expect its existing projects to be affected. SunCon stated that its clients have been receptive of its explanation. Given SunCon's explanation, we believe there should not be too many negative repercussions over time once the case is settled, though there may be near-term distractions," Maybank IB said. The research house reaffirmed its "BUY" recommendation on SunCon, maintaining a target price of RM6.72, premised on a 24x fiscal year 2026 price-to-earnings ratio and anchored by annual job win expectations of RM7 billion. The stock was among the most actively traded in the morning session, with over 11.69 million shares changing hands. As of 10.24am, the stock fell to an intraday low of RM5.29, down 20 sen or 3.6 per cent from Monday's close of RM5.49.
New Straits Times
29-05-2025
- Business
- New Straits Times
Sunway Construction lands RM1.15bil data centre jobs for big US firm
KUALA LUMPUR: Sunway Construction Group Bhd's subsidiary Sunway Construction Sdn Bhd has been hired by a big US-based technology company to build two data centres totaling RM1.15 billion. Sunway Construction, in a statement, said the projects are expected to contribute to its earnings for the current and subsequent financial years, with completion targeted for the first quarter of 2027. Sunway Construction has so far secured RM3.5 billion of new orders, accounting for more than half of its 2025 order book replenishment target range of RM4.5 billion-RM6 billion. As a result, its total outstanding order book has risen to RM7.9 billion. Sunway Construction group managing director Liew Kok Wing said the new projects expand its order book for the year and fortify earnings visibility over the next two years. "Our strong performance in the first quarter of 2025 reflects the sustained momentum across our operations. "We are confident that this positive momentum will continue in the current financial year, underpinned by accelerated progress on data centre projects and a robust outstanding order book, including newly-secured projects," he added.
The Star
20-05-2025
- Business
- The Star
Sunway Construction's 1Q net profit soars to RM75.71mil
KUALA LUMPUR: Sunway Construction Group Bhd 's (SunCon) net profit for the first quarter ended March 31, 2025 (1Q 2025) surged to RM75.71 million, up from RM32.40 million in the same period last year. Revenue climbed 132 per cent to RM1.40 billion compared with RM604.80 million previously, underpinned by robust performance from the construction segment. In filing with Bursa Malaysia, SunCon said its construction segment delivered a remarkable improvement in performance, with revenue rising 152 per cent, from RM543.6 million in 1Q 2024 to RM1,369.9 million in 1Q 2025. "The division reported a profit before tax of RM112 million in the current quarter, nearly tripling the profit recorded in the corresponding quarter of the preceding year. "The stellar performance was fueled by accelerated progress of several data centre projects during the quarter,' it said. The group declared a single-tier first interim dividend of 5.00 sen per ordinary share for the financial year ending Dec 31, 2025. Its group managing director, Liew Kok Wing, said the positive trajectory is expected to continue, supported by accelerated progress on data centre projects, demonstrating its commitment to delivering sustainable total shareholder returns. "We continue to see a healthy pipeline of data-centre tenders. Recent indications from the United States (US) administration to recalibrate artificial intelligence (AI) chip export restrictions augur well for Malaysia, reinforcing its position as a regional hub for digital infrastructure investment. "SunCon has also announced a RM393 million data centre contract today, a positive development signifying that data-centre investment in Malaysia remains intact,' he said. Liew added that as of May 2025, SunCon had secured RM2.2 billion in new orders, achieving 49 per cent of the lower end of its 2025 order book replenishment target of RM4.5 billion to RM6.0 billion. "The group is optimistic of registering positive growth in the 2025 financial year, supported by its robust existing outstanding order book of RM6.6 billion as of March 31, 2025,' he added. - Bernama
