Established in 1981, Sunway Construction Group Bhd (SunCon) has emerged as a leading pure-play construction company listed in Malaysia. As of 9 May 2019, SunCon is worth RM 2.56 billion in market capitalisation. In this article, I like to bring an update on its latest financial results, plans for its future, and valuation figures based on its current stock price of RM 1.98 a share.

Thus, here are 10 things to know about SunCon before you invest:

  • Financial Results
    SunCon has achieved continuous growth in revenues and shareholders’ earnings for the last 5 years. Revenues had grown from RM 1.88 billion in 2014 to RM 2.26 billion in 2018. It has sustained its net profit margin (NPM) of 6 – 7% and thus, contributing to rising shareholders’ earnings, from RM 112.8 million in 2014 to RM 144.7 million in 2018. As such, its earnings per share (EPS) has increased from 8.7 sen in 2014 to 11.2 sen in 2018.

    Overall, SunCon has a 5-Year Return on Equity (ROE) average of 26.46% a year. It means, SunCon had made, on average, RM 26.46 in earnings a year from every RM 100.00 in shareholders’ equity from 2014 to 2018.

Source: SunCon’s Annual Reports

  • Breakdown of Major Customers
    SunCon derives most of its income from five key customers. The major customers which had contributed to SunCon’s growth in both revenues and earnings for the past 5 years are MMC Gamuda and Putrajaya Bina Sdn Bhd (PBSB).

    From MMC Gamuda, it had secured KVMRT Line 1 Package V4 and Line 2 Package V201 worth RM 1.2 billion each in June 2012 and April 2016.

    From PBSB, it has secured Putrajaya Parcel F valued at RM 1.6 billion. It is into the construction of government office buildings at Putrajaya.

    Here is a breakdown of SunCon’s major customers in 2018 and amount of sales contribution from MMC Gamuda and PBSB for the last 5 years:


List of Major Customers
Revenue (RM ‘000)% of Total Revenues
1Putrajaya Bina Sdn Bhd536.323.8%
2Sunway Group’s In-House Projects 465.020.6%
3MMC Gamuda295.913.1%
4Prasarana Negara Bhd190.08.4%
5Cititower Sdn Bhd151.36.7%
SunCon’s Total Revenues2,256.8100.0%

Source: SunCon’s Annual Report 2018

  • Order Books
    For the last 5 years, SunCon has secured RM 11.5 billion in construction order book, mostly from its five key customers stated above. They have contributed to SunCon’s financial results during the 5-year period.

Source: SunCon’s Annual Reports

Out of which, SunCon has RM 5.22 billion in outstanding order book as of 31 December 2018. It is the second highest in the 5-year period.

Source: SunCon’s Annual Reports

In 2019, SunCon has set a target to secure RM 1.5 billion in brand new construction order book. To-date, it has secured 4 new contracts worth RM 967.2 million, thus, achieving 64.5% of its target for 2019.

Presently, its key outstanding order books are as followed:



OutstandingOrder Book(RM Million)OutstandingOrder Book(%)

LRT 3: Package GS07-08
Q2 2021



TNB HQ Campus
(Note: 19/2/2019)

Q2 2021



V201 + S201

Q2 2021



Sunway Medical Centre  (SMC 4)
Q4 2019


5Sunway Velocity 2Q4 20213525.7%
SunCon’s Outstanding Order Book (Updated at 9 May 2019)


Source: SunCon’s Q4 2018 Results Presentation, Bursa Announcements

  • Updates on LRT 3 & MRT V201
    The total project cost for LRT 3 is revised to RM 16.6 billion, a reduction from the budgeted RM 31.5 billion.

    SunCon’s LRT 3 Package GS 0708 from Kawasan 17 to Sri Andalas would progress at a slower pace due to a review to redesign six stations. More updated information would be announced in due time.

    As for MRT V201, MMC Gamuda, its client has confirmed the works for above ground works to continue. Hence, this project would continue to proceed as planned with some reduction to scope to these stations.

  • Balance Sheet Strength
    In 2018, SunCon has reported total borrowings of RM 113.6 million and total assets of RM 1.75 billion. Thus, its gearing ratio is 19.22%, which is a continuous fall from 35.44% in 2014. Its total borrowings consists of:

    – RM 107.5 million in loan bills receivables
    – RM 6.1 million in revolving credits.

    The borrowings are short-term in nature and are primarily used to fund short-term working capital. It does not have long-term borrowings as of 31 December 2018.

  • Cash Management
    SunCon has increased its cash & cash equivalent from RM 277.6 million in 2014 to RM 484.7 million in 2018. It consists of:


Cash at Hands

Licensed Bank
Other Financial Institution
Amount(RM ‘000)


Interest Rate (%)n/a3.70%5.57%

The amount of interest received by SunCon has exceeded its amount of interest costs incurred during the 5-year period.

Source: SunCon’s Annual Report 2018

  • Who Owns SunCon?
    As of 20 March 2019, Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling has a total of 65.11% shareholdings, direct & indirect in SunCon. Evan Cheah, his son, is appointed as a non-executive director of SunCon. Employees Provident Fund Board has 8.38% shareholdings of SunCon and hence, is the second largest shareholder of the company.

  • P/E Ratio
    As of 9 May 2019, Suncon is trading at RM 1.98 a share. In 2018, it has made RM 0.112 of earnings per share (EPS). Thus, its current P/E Ratio is 17.68, which is higher than its 4-year average of 16.88.

  • P/B Ratio
    As of 31 December 2018, SunCon has net assets of RM 0.457 per share. Thus, it has a current P/B Ratio of 4.33, at par with its 4-year average of 4.31.

  • Dividend Yields
    In 2018, SunCon has paid out RM 0.07 in dividends per share (DPS). Its current dividend yield works out to be 3.54% a year, close to its 4-year average of 3.46% a year.

Source: SunCon’s Annual Reports

VIA’s Verdict

Overall, SunCon has delivered growth in its financial results for the last 5 years. In 2019, SunCon would be generating income from its outstanding order books of RM 6.19 billion.

Should we invest in SunCon? Well, it depends on your views upon projects such as LRT 3 and MRT V201 and its current valuation figures.

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