SunCon scored its first order book win in FY23 with an RM218.8m solar plant project in Perak, this raises the group’s outstanding order book level to RM5.92b, with strong earnings visibility up to FY24.
To highlight, Sunway Construction Sdn Bhd, a wholly-owned subsidiary of SunCon, was awarded the job by GBS Suria Sdn Bhd, a wholly-owned subsidiary of Gopeng Bhd. This is for the EPCC works for a solar photovoltaic energy generating facility with ancillary equipment and facilities, which is capable of generating 50MW in Kampar. Works commenced immediately on Jan 17 and completion of the project is expected to be within 20 months, or by Sep-24. MIDF expects a bottom line margin of between 5% to 7%, which sums up to an earnings contribution of about RM6.3m to RM8.8m in FY23 and RM4.6m to RM6.5m in FY24.
As disclosed, the contract is classified as a related party transaction (RPT) as Fortuna Gembira Enterprise Sdn Bhd, an indirect wholly-owned subsidiary of its parent Sunway, is, in turn, a major shareholder of Gopeng, which is 19.3% according to checks. SunCon’s director Tan Sri Dr Chew Chee Kin also sits on the boards of Sunway and Gopeng.
The research house expects FY23 to be a smooth sailing year for the company, given the strong earnings visibility based on its outstanding order book of almost RM6b. It is confident of the group’s ability to secure more jobs this year, internally within the Sunway Group, and also infrastructure projects, such as one of the main MRT3 packages.
Its is also worth noting that the group is also currently negotiating the terms and conditions for the engineering, procurement, and construction (EPC) of a coal-fired power plant at the Hau Giang Province in Vietnam, a project worth USD2.2b (RM9.69b) which will be undertaken via a 60:40 joint-venture with Power Engineering Consulting Joint Stock Company 2.
MIDF places SunCon as top picks for the construction sector, alongside its larger counterparts Gamuda and IJM Corp.
