Sunway Construction Group Berhad (SunCon) with its new contracts sealed, which is a data centre project and the finalization of the Song Hau 2 power plant in Vietnam, is set to raise its internal 2024 orderbook replenishment target to RM 2.5 billion from RM2 billion.

According to Phillip Capital Research, while there are many factors that should be taken into consideration, the key rerating catalysts for the company’s share price include securing the Song Hau 2 project and the increase in orderbook replenishments.

The research firm envisages that there will be opportunities for SunCon to venture into overseas data centre projects through its existing clients, including Yellowood Properties and K2 Strategic, by relying on its robust domestic track record.

Currently, industry sources reveal that SunCon is very keen on tendering for a few sizeable data centre projects and each of these individual contracts is estimated to have a value to the tune of RM1 billion.

However, the progress of the Song Hau 2 thermal power plant in Vietnam is shrouded in uncertainty and the Vietnamese authorities have granted an extension to the project but it should only become clearer in June 2024.

Based on its back of the envelope calculations, Phillip Capital Research sees 23 percent to 48 percent earnings based on upside potential which would easily witness the target price of a share rising to RM2.53.

-THE MALAYSIA VOICE