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Sunway Construction Group Bhd (SunCon) remains a “buy” call for research firms after its unit secured two new jobs worth RM463 million — one of which is a massive solar project.
The RM185.01 million contract is for the engineering, procurement, construction, testing, and commissioning (EPCC) of a 50MW solar photovoltaic energy generating facility in Klang, Malaysia, awarded by Sharp Ventures Solar Sdn Bhd.
The project is soon to start in December 2022 and is expected to be completed within the next 18 months, or by May 2024 utmost.
According to MIDF Research, the net margins from both these contracts will be in the range of 5%, with the solar project contributing RM6.5 million in FY2023 and RM2.75 million in FY2024.
In light of the letter of intent issued on December 27, 2021, the solar project has already been accounted for as part of the replenishment in 2021.
Meanwhile, RHB Research has retained a “buy” call with a target price of RM1.93, despite the possibility of the MRT3 civil work packages being delayed to the first quarter of 2023 from the fourth quarter of 2022.
SunCon mentions “We note that SunCon is still behind on its replenishment target of RM2 billion this year, with only RM881.3 million of jobs secured year-to-date, or 44.1% of its target,” it said.