Sunway Construction Wins RM920.8m Johor Data Centre Deal

Sunway Construction (SUNCON) added RM920.8m of mechanical, electrical and plumbing (MEP) fit-out work for a data centre in Johor, the largest contract flagged in M+ Online’s latest research note. The award pushed the company’s FY26 new orders to RM8.06bn and its outstanding order book to RM11.7bn.

The news came on a day when Bursa Malaysia closed lower, with PBBANK down 4.0 sen and MAYBANK down 14.0 sen. Market breadth still leaned positive, with 646 gainers against 441 losers, and the Technology sector rose 3.17% while Financials fell 0.70%.

Sunway Construction Lands RM920.8m Johor Data Centre Job

According to Malacca Securities Research, the award is an addition to existing work, meaning it builds on a project relationship rather than starting from zero. The research house highlighted it as a key positive for the company’s near-term revenue visibility.

Data centres have become one of the most active construction niches in Malaysia, and Johor has been a major hub for hyperscale facilities. Kee Ming (KEEMING) also picked up a RM44.17m electrical engineering subcontract for a Puncak Alam hyperscale data centre, scheduled for completion by July 2027.

What Sunway Construction Does

Sunway Construction is the construction arm of the Sunway Group, handling building projects that include the MEP installations that make a facility operational. MEP fit-out covers the mechanical systems, electrical wiring and plumbing that go in after the main structure is built.

That makes the work part of the late-stage build cycle, where data centre developers install cooling, power and piping systems. The research house’s note focuses on the order win rather than the company’s broader business mix.

Key Financial Numbers Behind the Contract

The RM920.8m award equals about 11.4% of the company’s FY26 new orders of RM8.06bn, based on our arithmetic from the report’s figures. It also represents roughly 7.9% of the outstanding order book of RM11.7bn.

The outstanding order book sits about 1.5 times the FY26 new order intake, which suggests the company has a sizeable pipeline to work through. The report does not break down revenue recognition timing or margins for this contract.

Valuation Basis and Malacca Securities’ Stance

The summary of Malacca Securities Research’s note does not state a rating or target price for Sunway Construction. It also does not outline the valuation method, such as discounted cash flow or price-to-earnings, used for the stock.

Readers who want the research house’s rating, target price and forecast assumptions should consult the full report, which is available from M+ Online.

Risks Flagged in the Research Note

The research house noted that AI data-centre stocks in the United States faced regulatory concerns after the Democrats’ midterm sweep, and that Democratic control of Congress could reshape AI regulation. It said data-centre operators IREN and Applied Digital (APLD) may face tighter scrutiny, a sentiment shift that could spill across the sector.

On the domestic front, the FBM KLCI’s direction hinges on Bank Negara Malaysia’s OPR decision at 3pm, with eight of nine economists expecting the rate to stay at 2.75%. Any surprise could shift sentiment in rate-sensitive counters and ripple into construction names that rely on project financing.

What This Means for Retail Investors

For retail investors, the report offers a clear data point: a RM920.8m contract is a large addition relative to the company’s order flow. Whether that translates into earnings depends on execution, margins and the pace of project delivery, none of which the summary quantifies.

The research house’s broader message is that Wall Street’s post-election rally may support sentiment, while regulatory crosscurrents affect data-centre names. Investors weighing a position can compare SUNCON’s order book with the smaller awards cited in the same note, such as Binastra’s (BNASTRA) RM303.8m automated warehouse contract in Klang. This article is for information only and is not a recommendation to buy or sell.

Key Takeaways

• Sunway Construction secured RM920.8m in MEP fit-out work for a Johor data centre, according to Malacca Securities Research.
• FY26 new orders rose to RM8.06bn, with an outstanding order book of RM11.7bn.
• The research house’s summary does not disclose a rating or target price for SUNCON.
• Regulatory scrutiny of AI data-centre operators in the US is a risk the research house flagged.
• The full report is available from M+ Online for the complete valuation and forecasts.

Frequently Asked Questions

Does Malacca Securities have a target price for Sunway Construction?

The summary of Malacca Securities Research’s note does not state a target price or rating for Sunway Construction. Readers can find the research house’s valuation call in the full report available from M+ Online.

How big is the Johor data centre contract compared with Sunway Construction’s order book?

The RM920.8m award equals about 11.4% of FY26 new orders of RM8.06bn and roughly 7.9% of the outstanding order book of RM11.7bn, based on the report’s figures. These percentages are our own arithmetic rather than figures stated by the research house.

Where can I read the full Malacca Securities report on Sunway Construction?

The full report is available from M+ Online, the publisher of the research note. The report covers the Sunway Construction contract alongside market data and other corporate announcements from the same day.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Ratings and target prices cited are those of Malacca Securities Research and are subject to change. Always do your own research before making investment decisions.

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