PETALING JAYA: Berjaya Research Sdn Bhd expects AWC Bhd to continue capitalising on Malaysia’s robust data centre investment cycle by leveraging its established track record to secure additional data centre-related plumbing contracts, following another similar contract secured in early April 2026.
This is after AWC, the Main Market-listed leading engineering services group, through its wholly-owned subsidiary, Qudotech Sdn Bhd, secured a letter of acceptance from a joint venture contractor for the execution and completion of plumbing, silo tank, and internal sanitary works in relation to a data centre project, for a subcontract value of RM23.1 million.
The contract is expected to be completed by June 2027 and contribute positively to the group for the financial year ending June 30, 2027 (FY27) until its completion.
AWC Group CEO and president Datuk Ahmad Kabeer Mohamed Nagoor said this marks its engineering division’s third data centre contract secured in the past 12 months, and a solid start to FY27.
“Achieving three such wins over this period affirms that our presence in this space has evolved from an emerging opportunity into a consistent and growing stream of work.
“As demand for data centre infrastructure continues to accelerate, we are increasingly recognised as a trusted partner for complex, mission-critical projects of this nature.
“We intend to build on this momentum to establish a deeper and more enduring presence in the sector,“ he said.
Ahmad Kabeer said overall, the group’s focus remains on the disciplined execution of a healthy order book, which stood at RM865 million as of end-March 2026, excluding the latest contract win.
“The contracts secured in FY26 have already begun to contribute positively, as reflected in our Q3 FY26 results, and we expect this to gain further traction as execution progresses,” he added.
Berjaya Research believes the latest win further reinforces earnings visibility over the next two to three years, underpinned by an estimated outstanding order book of RM770.0 million as at end-July.
“The awarded contract is expected to fetch a profit before tax (PBT) margin of 8%-9%, which is similar to past plumbing works for data centre projects secured by the group, potentially translating to an estimated PBT of RM1.8 million-RM2.1 million over FY27,“ the research firm said in a note.
Berjaya Research maintained its earnings forecast and order book replenishment assumption for FY27, as the contract falls within the research firm’s FY27 replenishment assumption.
“We maintained our Buy recommendation on AWC with an unchanged target price of RM0.66, derived from FY27’s sum-of-the-parts valuation.
“We continue to like AWC for riding on the ongoing data centre developments in Malaysia, and its proactive exploration of global business opportunities,“ Berjaya Research said.
Key downside risks include receivables impairment risk, rising input costs could impact profit margins, and project delays and execution risk amid the US-Iran conflict.
