KUALA LUMPUR: Sunway Construction Group Bhd is targeting RM2.7 billion-RM3.0 billion in new contract wins for 2024, while tendering for RM26 billion of projects, said Affin Hwang Capital.
Works for the Klang Valley MRT Line 3 (MRT3) project are at the forefront of its tender book with Package CMC301 and CMC302 contributing about 50 per cent of its tender book.
SunCon secured new contracts worth RM2.5 billion in 2023, surpassing its initial target of RM2 billion, said Affin Hwang which hosted SunCon group head of finance Elaine Lai and senior finance manager Angelynn Low for a meeting with institutional investors recently.
Affin Hwang said steady progress had been made towards hitting its 2024 target new contract wins as SunCon had secured RM831 million (27-30 per cent of target) worth of jobs year todate mainly contributed by the in-house Sunway Ipoh Mall project worth RM721 million.
On the foreign front, SunCon is participating as an engineering, procurement, construction and commissioning contractor for the US$2.4 billion Song Hau 2 thermal power plant (SH2) project in Vietnam through its 55 per cent-owned joint venture with local partner Power Engineering Consulting Joint Stock Company 2.
SunCon's share of the work is worth about US$1.32 billion (RM6.3 billion) if awarded.
Toyo Ventures, the developer for SH2, is facing challenges to reach financial close due to financiers' pushback on ESG concerns on a coal-fired power plant and Vietnam's energy transition agenda.
"We believe the SH2 project is a potential positive re-rating catalyst for SunCon as our scenario analysis shows an 11-20 per cent lift in 2025-26 core earnings per share and a blue-sky target price of RM3.52 if the project kicks off," Affin Hwang said
SunCon remains the firm's top mid-cap sector "Buy" with a target price of RM2.90.