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The first contract is a RM278 million in-house job from Sunway Flora Sdn Bhd, which commenced on Nov 1 and is expected to be completed by Oct 31, 2025.
The job scope involves the development of two blocks of condominiums in Taman Mutiara, Bukit Jalil, including a podium, car park, common facilities and a swimming pool.
The second job, awarded by Sharp Ventures Solar Sdn Bhd, is the RM185.01 million contract for the engineering, procurement, construction, testing and commissioning of a solar photovoltaic energy generating facility with ancillary equipment and facilities with a generating capacity of 50MW in Klang.
Works will commence in December 2022 and are expected to take 18 months to complete, or by May 2024.
MIDF Research expects the net margins from these projects to be about 5% each, which will see the condominium development contributing about RM6.95 million to SunCon’s bottom line in financial years (FY) 2024 and 2025, while the solar project will contribute RM6.5 million in FY2023 and RM2.75 million in FY2024.
It estimates that SunCon’s outstanding order book currently stands at RM4.32 billion, giving it strong earnings visibility over the next three years.
“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,” MIDF said.
The solar project has already been accounted for as part of the replenishment in 2021 in view of the letter of intent that was issued on Dec 27, 2021.
“We believe that the upcoming rollout of the mass rapid transit 3 (MRT3) contracts will give SunCon’s order book a boost this year, apart from other potential job wins,” it said, adding that it maintained a “buy” call with a target price of RM1.87.
RHB Research also maintained a “buy” call with a target price of RM1.93, despite a highly possible delay of the MRT3 civil work packages to the first quarter of 2023, from the fourth quarter of 2022.
The firm believes that its FY2022 replenishment target of RM1.5 billion will likely be met.
“This is backed by the group’s RM1 billion to RM1.5 billion tender book relating to factories and data centres,” it added.
At 10am, SunCon’s share price was a sen higher at RM1.56 with 2,000 shares traded.
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