RHB Investment Bank Bhd (RHB Research) has maintained its OVERWEIGHT call on the construction sector, with Gamuda, Sunway Construction and Binastra named as its top picks. The research house said progress on the East Coast Rail Link (ECRL) project remains encouraging, with the government’s timeline appearing well on track.
According to the Ministry of Transport, the ECRL has achieved 87% completion as of August, and the first phase connecting Kota Bharu to Gombak is expected to be finished by the end of 2026. RHB Research said this is consistent with the government’s commitment under Budget 2026, reinforcing its confidence in the sector’s growth outlook.
The latest cost estimate for the ECRL, revised in December 2022, stands at RM50.3 billion. The 665km line will feature 20 stations stretching from Kota Bharu to Port Klang, alongside the Serendah Bypass which will facilitate northern cargo movement. The project also includes rail extensions from the Jalan Kastam station to both Westports and Northport.
RHB Research’s on-site observations between Gombak and Kuantan revealed steady development in bridge and station works. The ECRL Bridge 28, completed in six months by China Communications Construction Co Ltd, is a sign of strong project momentum. Stations in areas such as Bentong, Temerloh and Gombak have shown visible progress, indicating that key civil works are moving into advanced stages.
Contract awards for the ECRL have already exceeded expectations. Malaysia Rail Link reported that RM18.6 billion worth of contracts have been secured by local companies as of July, surpassing the initial target of RM10.8 billion. Major contractors include IJM Corp, Advancecon, HSS Engineers, and Tanco Holdings.
The next stage of the project, known as Section D, involves a 25km spur line connecting the ECRL’s Jalan Kastam station to Port Klang’s Northport and Westport terminals. According to RHB Research, at least five consortiums, including WCT Holdings–MMC Corporation JV, Dhaya Maju Infrastructure (Asia) and SIPP Rail–YTL Construction JV, have submitted bids, with offers estimated between RM600 million and RM900 million. Physical works for Section D are expected to begin by the end of 2025 and be completed by December 2027.
RHB Research added that potential expansion plans to extend the ECRL to Rantau Panjang, Kelantan, near the Thailand border, could further enhance investment prospects. Such a move would create opportunities for industrial and logistics development along the route. The research house highlighted IJM Corp as a likely contender to benefit, given its strong track record in industrial construction, including data centres and semiconductor facilities.
However, RHB Research cautioned that the key downside risk remains possible delays in completing the entire project by January 2028. Despite this, it believes the ongoing pace of construction and the government’s infrastructure push continue to provide a solid foundation for Malaysia’s construction sector recovery.
