MONEY MASTER

Quick Summary Sunway Construction’s FY2025 net profit beat consensus by over 20% Shares climbed to a  new all-time high of RM6.57 Strong  data centre pipeline driving upside momentum 12 out of 15 analysts maintain a  ‘Buy’ recommendation Stock Surges on Strong Earnings Shares of  Sunway Construction Group Bhd  jumped to a record high on Tuesday after delivering  FY2025 earnings more than 20% above market expectations . Intraday high:  RM6.57 (+4%) Market cap:  RM8.6 billion YTD gain (2026): +14% Analysts swiftly raised earnings forecasts and target prices following the results. Data Centres: The Main Growth Engine The builder continues to benefit from Malaysia’s booming  data centre construction wave , driven by demand for: Advanced computing Artificial intelligence infrastructure According to Hong Leong Investment Bank: SunCon targets  RM6 billion in new job wins  this year Ongoing tenders could provide  further upside , espec...

Gamuda Bhd (KL:GAMUDA) has secured a  RM2.138 billion contract  through its engineering unit to construct hyperscale data centres for Eco World Development Group Bhd (KL:ECOWLD). Contract Details Client:  Quantum Alpha Sdn Bhd, a unit of EcoWorld. Scope of Works: Main structures of  two data centre blocks . Power substation  and  water reservoir . Related  infrastructure and facilities . Timeline:  Project begins  3Q2025 , targeted completion by  3Q2027 . Strategic Significance The award underscores Gamuda’s push into  digital infrastructure , a growth area aligned with rising demand for  cloud computing and AI . Comes shortly after Gamuda’s tie-up with  Gentari (Petronas’ clean energy arm)  to develop  1.5GW of solar + storage projects  aimed at powering hyperscale data centres. Follows another major win this month: a  RM1.13 billion highway project  in Sarawak via joint venture with Naim Holdings...

China State Construction Engineering (SHSE:601668) has seen its stock climb 43% over the past five years, but its financials suggest investors should tread carefully. Key Metric: ROCE Falling Return on Capital Employed (ROCE):  6.8%, based on the latest 12 months. Down from  9.6% five years ago , signaling a decline in profitability from its capital investments. ROCE is roughly in line with the construction industry average of  5.7% , but low in absolute terms. Capital Use vs. Returns The company has been deploying more capital, yet sales haven’t grown significantly in the last year. This suggests ongoing long-term investments that may take time to yield results. High Liabilities Add Risk Current liabilities:  55% of total assets. Heavy reliance on short-term creditors raises operational risk. A lower ratio would indicate stronger financial stability. Takeaway While China State Construction Engineering is reinvesting in its business, declining returns and high liabil...

The government will keep the  Sales and Services Tax (SST)  revenue threshold for construction services at  RM1.5 million , rejecting industry appeals to raise it to RM3 million, Deputy Works Minister  Datuk Seri Ahmad Maslan  told the Dewan Rakyat. Ahmad said the current threshold is  “appropriate” , ensuring that  small-scale contractors with project values below RM1.5 million remain unaffected . He added that the government had communicated the July 1 implementation timeline early to allow industry players to prepare. “There has been no discussion to raise the threshold, and I do not foresee it happening. At this point, the RM1.5 million threshold is sufficient,” Ahmad said. Under the revised policy, a  6% SST  applies to construction service providers whose taxable revenue exceeds RM1.5 million within any 12-month period. Exemptions include residential buildings, public amenities within residential developments, religious facilities, publ...

Sunway Construction (SUNCON) saw its stock tumble 18% before recovering, after news broke that one of its employees is under MACC investigation for alleged misconduct with subcontractors. While the case is still under investigation, it’s clear that  SUNCON is taking swift and transparent action: The employee has been suspended. SUNCON reaffirmed its  zero-tolerance stance  on bribery and corruption. The firm holds  ISO 37001:2016 Anti-Bribery certification  and complies with  MACC Act Section 17A . Impact on valuation:  Kenanga removed the 5% ESG premium, revising the target price to RM5.66 (from RM5.94), but maintains a  “Market Perform”  rating. Why it matters:  ESG isn’t just a checkbox—this case is a  real-world stress test . SUNCON's robust compliance framework might be its shield, but it also highlights that  integrity culture must go beyond policies .

Top picks: Gamuda, Sunway Construction, Binastra RHB Investment Bank has reaffirmed its  OVERWEIGHT  rating on Malaysia’s  construction sector , maintaining confidence despite potential US export restrictions on  AI chips  to Malaysia and Thailand. What's happening? The US is reportedly drafting a rule to curb AI chip shipments over concerns they may be rerouted to China. But the proposal: Is not finalized , and Includes a grace period  for US firms and allies to continue shipments without a licence. Why RHB remains positive: Strong pipeline  of  data centre (DC) projects  continues. Ongoing investment from global tech giants like  Google, AWS, Microsoft , and  Oracle  in Malaysia’s DC infrastructure. Possible exemptions for “ friendly nations ” and validated firms could soften any export ban impact. Key DC hotspots : Elmina Business Park Phase 2 Eco Business Park V, Puncak Alam Port Dickson (500–700MW capacity) Nilai (US-backe...

Gamuda Bhd has achieved an all-time high construction order book of RM36 billion for the second quarter ending January 31, 2025 (2Q25), breaking its own record for the fourth consecutive year. Key Highlights: Revenue : Increased by 19% to RM4 billion, compared to RM3.4 billion in 2Q24. Net Profit : Rose by 5% to RM218.8 million, compared to RM208.8 million in 2Q24. Overseas Earnings : Contributed 53% of total construction earnings, with the remaining 47% from domestic projects. Penang Land Reclamation : Reclaimed 91 acres of land by January 2025, driving growth in domestic revenue. Half-Year Performance (1H25): Revenue : Grew by 32% to RM8.2 billion, compared to RM6.2 billion in 1H24. Net Profit : Increased by 5% to RM424 million, compared to RM403.8 million in 1H24. Outlook: Gamuda's domestic order book is expected to expand further next month with the signing of several large domestic contracts, driving future growth in margins and earnings for its construction division. The comp...

Key Takeaway: Hume Cement's profit declined modestly in 1QFY2025 due to lower demand, but the company declared a higher dividend of four sen per share in response to improved production efficiency. Hume Cement Industries Bhd reported a net profit of RM47.42 million for the first quarter ended Sept 30, 2024, a slight decrease from RM48.33 million in the previous year, as reduced demand affected cement sales. Revenue dropped 7.48% year-on-year to RM283.71 million , while earnings per share fell to 6.55 sen from 9.46 sen. Despite lower demand, Hume Cement offset some of the impact through reduced input and production costs , driven by manufacturing efficiency improvements. The company announced a dividend of four sen per share , double last year’s payout, with payment set for Dec 18. Hume Cement expects growth in demand as Malaysia’s construction sector expands. The stock closed at RM3.42 , up 0.88%, with a year-to-date gain of 52%.

Shares of Pansar Bhd (KL) reached their highest level in nearly three months on Monday after the company secured a substantial RM804.7 million contract. The stock rose by as much as 6.1%, or 3.5 sen, to 60.5 sen, its highest since June 12, 2024, before settling at 59.5 sen in early trading. This movement gave Pansar a market capitalization of RM304 million on Bursa Malaysia. Key Takeaways: Major Contract Win for Urban Transportation Project : Pansar's recent surge in stock price follows the announcement of an RM804.7 million contract win for the Kuching Urban Transportation System (KUTS) Blue-Line Package 2 in Sarawak. This project involves infrastructure construction, including architectural design, mechanical and electrical works, roadworks, and other related activities, for the stretch between Stutong and Hikmah Exchange. Increased Trading Activity : The stock saw heightened trading activity, with 1.09 million shares traded, nearly triple the 200-day moving average. Despite the ...

Shares in Gamuda Bhd (KL) surged to a new record high on Thursday, fueled by news of its joint venture (JV) in Australia securing a A$1.6 billion (RM5 billion) contract and renewed interest in construction stocks on Bursa Malaysia. Key Highlights: Stock Performance: Gamuda's share price increased by as much as 2.91% to an intraday high of RM8.49, closing 0.36% higher at RM8.28, the highest closing price since its 1992 listing. The company is valued at RM22.96 billion, with its share price soaring 42% over the past two months. At its current market capitalization, Gamuda is the 21st largest company on Bursa Malaysia and a potential FBM KLCI constituent. Sector Performance: The Bursa Malaysia Construction Index, tracking 49 stocks, rose 0.36% to 316.83 points, its highest since February 2018, gaining over 65% year-to-date. Recent Achievements: Gamuda's JV with French rail engineer Alstom SA secured a contract to upgrade and automate signalling and train control systems in Perth’s...

Hong Leong Investment Bank (HLIB) Research has maintained its 'overweight' rating for the construction sector, citing a significant 41% year-on-year increase in domestic contract awards to RM20.7 billion, primarily driven by data centre (DC) awards. Key Highlights: Contract Awards Surge: HLIB reported that contracts awarded in the first half of 2024 nearly matched the total awarded in 2023, amounting to RM21.8 billion. The number of awarded projects increased by 90%, with 97 contracts in 1H2024 compared to 51 contracts in 1H2023. Significant Quarterly Performance: The second quarter of 2024 saw RM13.8 billion in contracts awarded, making it the second highest quarterly flow since the commencement of HLIB's database in 1Q2009, only surpassed by 1Q2016. Anticipated Projects in 2H2024: HLIB foresees the potential for an acceleration in contract awards in the second half of the year, driven by long-delayed major infrastructure projects. Positive sector sentiment may also be b...