Tradeview Capital Sdn Bhd has initiated a ‘Subscribe’ call on ACE Market-bound Sum Technology Bhd, assigning a fair value of 39 sen, implying a 39% upside, underpinned by its exposure to semiconductor, data centre (DC) and electric vehicle (EV) capital expenditure cycles.
The research house said Sum Technology’s valuation reflects its strengthening earnings visibility from turnkey engineering solutions, particularly in cleanroom and MEPF (mechanical, electrical, process utilities and firefighting) systems, supported by a robust tender book of about RM380 million.
Growth is expected to be driven by rising artificial intelligence-related infrastructure demand, China+1 supply chain diversification and ongoing EV-related investments in Malaysia, which are boosting demand for semiconductor and data centre facilities.
The group’s FY25-FY28 revenue is forecast to grow at a 36.6% CAGR, with margins expected to improve to 21%-23% by FY27-FY28 on a higher mix of DC and semiconductor projects.
Tradeview highlighted that Sum Technology is also benefitting from an expanding pipeline of projects, including a secured Phase 4 data centre job and potential follow-on EV-related contracts, supported by IPO proceeds that will enhance working capital and bonding capacity.
A key growth pillar is its expansion into the Philippines, where Sum Technology is targeting a deeper presence in semiconductor localisation and accelerating data centre investments. The segment is expected to contribute up to 24% of group revenue by FY26-FY28, with revenue projected to grow at a 44% CAGR over the period, driven by higher-margin MEPF projects and stronger customer penetration.
The research house also noted positively that the IPO does not include any offer-for-sale component, viewing it as a strong signal of management’s confidence in long-term growth prospects. As a result, Sum Technology is valued at a FY27F price-to-earnings multiple of 13 times, in line with domestic MEP peers.
