Sunway Construction has demonstrated strong performance with a significant rise in its target price to MYR6.29, driven by expanding data centre (DC) contracts and increasing industrial project wins. The company has been involved in high-value industrial projects, including warehouses and semiconductor facilities, contributing to an estimated annual job win of MYR4 billion and a projected three-year earnings compound annual growth rate (CAGR) of 24% from 2023 to 2026.

RHB Investment Bank (RHB) maintained a BUY rating for Sunway Construction, with an updated target price reflecting a 24% upside potential. The bank highlighted the company's leadership in securing DC construction jobs and its strategic positioning to benefit from the MYR8 billion carbon-neutral logistics hub and other significant projects in Sunway City Iskandar Puteri (SCIP). RHB also raised its job replenishment assumptions for FY25F and FY26F to MYR4 billion each, boosting earnings forecasts by 2%.

The growing demand for industrial buildings, supported by robust foreign direct investment (FDI) and increasing industrial property transactions, has reinforced RHB's positive outlook on Sunway Construction. The company's foreign shareholding has also increased, with expectations of further growth as the construction sector experiences an upcycle.

Analysts at RHB noted that the construction sector is poised for a re-rating, driven by a surge in public infrastructure projects and increased industrial demand. The adjustment in Sunway Construction's valuation reflects these optimistic prospects, with a new target P/E of 27x, surpassing the sector average.

With its strong project pipeline and favourable market conditions, Sunway Construction is well-positioned for continued growth, making it an attractive investment opportunity.