AWC has secured a SGD4.7m (c.RM14.8m) DBO contract from Singapore’s HDB for the installation of a Pneumatic Waste Conveyance System (PWCS) at Project EW & FM. The win lifts AWC’s outstanding order book to c.RM869.7m (2.1x FY25 revenue).
We view the award positively, reinforcing Stream Singapore’s PWCS positioning and extending earnings visibility into FY29F, with c.RM0.4m O&M revenue per year post-completion.
No changes to earnings forecasts, as the latest contract win falls within our FY26F order book replenishment assumptions.
Maintain BUY with an unchanged TP of RM0.92, based on 9x FY26F EPS of 10.2 sen, supported by a three-star ESG rating.
SGD4.7m PWCS Contract in Singapore. AWC, through its sub-subsidiary Stream Environment (S) Pte Ltd (SESG), has received a Letter of Acceptance (LoA) from the Housing & Development Board of Singapore (HDB) to design, build and operate (DBO) a Pneumatic Waste Conveyance System (PWCS) at Project EW & FM. The contract is valued at SGD4.7m (c.RM14.8m based on an exchange rate of SGD/MYR 3.18) and covers the full DBO scope for the PWCS infrastructure. The project will be implemented in two phases, consisting of a 12-month design period followed by a 24-month construction period, with works commencing upon the client’s instruction.
Our Take. We view the award positively as it reinforces Stream Singapore’s position as a key incumbent in Singapore’s PWCS market. Around 95% of the contract value pertains to design and build, with the remaining 5% tied to O&M (typically over 2 years). Although the timeline was not explicitly disclosed, we expect earnings contribution to begin in FY26F during the design phase, with a larger share recognised in FY27F-FY28F as construction ramps up, and the remainder in FY29F. Applying a 9% PBT margin, the contract is expected to generate c.RM1.3m in PBT over its 36-month duration (2.9% of FY26F PBT). While modest in size, the award enhances AWC’s multi-year earnings visibility and expands its recurring O&M pipeline in Singapore, estimated at c.RM0.4m revenue per annum post-completion based on the 5% O&M allocation over a two-year maintenance term. With this latest win, AWC’s outstanding order book rises to RM869.7m (2.1x FY25F revenue), providing solid medium-term earnings support.
Outlook. This marks the second PWCS contract win from HDB YTD, following the earlier SGD3.9m award, further reinforcing Stream Singapore’s positioning as a trusted partner to HDB. The repeated success strengthens our conviction in AWC’s Singapore outlook, supported by mandated PWCS adoption in new HDB developments and a sustained pipeline of public housing projects. To recap, HDB plans to launch 55,000 new BTO units between 2025 and 2027, alongside major township renewal in Clementi, Bukit Merah, Toa Payoh and Alexandra. As one of the key incumbents with a strong execution track record and extensive installed base, Stream Singapore is well positioned to secure additional PWCS packages and expand its recurring O&M revenue base over the longer term.
Earnings revision. We make no changes to our earnings forecasts, as the latest contract win falls within our FY26F order book replenishment assumptions.
Valuation. We maintain our BUY recommendation with an unchanged TP of RM0.92, based on 9x FY26F EPS of 10.2sen and supported by a three-star ESG rating. 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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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.133826 | 4.166633 |
| EUR | 4.811981 | 4.816870 |
| CNY | 0.583469 | 0.584053 |
| HKD | 0.531997 | 0.535726 |
| SGD | 3.176644 | 3.198993 |