AWC Berhad - RM82.5m IFM Contract in Putrajaya
Tue, 28-Oct-2025 08:10 am
by Tan Sue Wen • Apex Research

Counter

AWC (7579)

Target Price (RM)

0.88

Recommendation

Buy

·   AWC has secured an RM82.5m contract from Jabatan Kerja Raya Malaysia (JKR) for the facilities management and maintenance of buildings in Kompleks E, Putrajaya. The five-year contract lifts AWC’s outstanding order book to c.RM692.1m (1.7x FY25 revenue).

·   We view the award positively as it provides predictable cash flow that reinforces AWC’s earnings visibility until FY31.

·   The outlook for AWC’s IFM segment remains positive, supported by expanding recurring federal maintenance contracts and the upcoming concession retendering under a revised framework that better reflects cost inflation and asset lifecycle requirements.

·   Maintain BUY recommendation with a revised target price of RM0.88, based on 9x FY26F EPS of 9.7 sen and supported by a three-star ESG rating.

 

RM82.5m Facilities Management Contract in Putrajaya. AWC, through its wholly-owned subsidiary Ambang Wira Facilities Sdn Bhd (AWFSB), has accepted a Surat Setuju Terima (SST) issued by Jabatan Kerja Raya Malaysia (JKR) for the facilities management and maintenance of buildings in Kompleks E, Presint 1, Putrajaya. The five-year contract, valued at RM82.5m (inclusive of service tax), will commence from 1 January 2026 to 31 December 2030. The scope covers comprehensive facilities management services for the federal administrative complex.

 

Our Take. We view the award positively as it provides predictable cash flow that reinforces AWC’s earnings visibility until FY31. Assuming a PBT margin of 8% after excluding the impact of SST, the contract is expected to generate c.RM1.2m in PBT annually, representing about 2.9% of our FY26F forecast. Incorporating this win, AWC’s outstanding order book is estimated at RM692.1m (1.7x FY25 revenue), supporting medium-term earnings visibility.

 

Outlook. We expect AWC’s Facilities segment to strengthen following the expiry of several government concession contracts in December 2025, which had previously weighed on margins due to higher operating costs. The 31 federal concessions, accounting for about 30% of segmental revenue, are scheduled for renewal through a new tendering process under a revised framework that better reflects cost inflation and asset lifecycle needs. The evaluation is expected to take around six months, during which the Government will likely extend existing arrangements to ensure service continuity given AWC’s strong execution record. We believe AWC remains a favourable contender for renewal, supported by its proven two-decade track record in managing federal concession contracts.

 

Earnings revision. We make no changes to our earnings forecasts, as the latest contract win falls within our FY26F order book replenishment.

 

Valuation. We have raised our target PE multiple from 8x to 9x to reflect a more optimistic view of AWC’s IFM growth prospects following its recent contract win. New TP of RM0.88 (from RM0.78) is based on 9x FY26F EPS of 9.7 sen and supported by a three-star ESG rating. Maintain BUY. We like AWC for its (i) leading AWS system market share (90% in Malaysia, 40% in Singapore), (ii) predictable cash flows from both concessionaire and non-concessionaire segments, and (iii) promising growth prospects from untapped projects in Abu Dhabi, which collectively represent a potential RM1bn order book.

 

Risks. Failure to secure improved rates for government concession contracts under the IFM segment, slower-than-expected order replenishment in the Environment segment, and potential delays in mega infrastructure projects that could weigh on Rail segment prospects.

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