AWC has secured a RM42.3m subcontract from Gamuda Engineering Sdn Bhd for specialised MEP works (cold water, rainwater harvesting and sanitary systems) for a hyperscale data centre at Eco Business Park V, Puncak Alam, Selangor. The win lifts AWC’s outstanding order book to RM940.3m, equivalent to 2.3x FY25F revenue.
We view the award positively, as it further strengthens Qudotech’s positioning in the data centre segment and supports earnings growth through 1QFY28.
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 RM0.72, based on 9x FY26F EPS of 8.0sen, supported by a three-star ESG rating.
Bags RM42.3m Hyperscale Data Centre Subcontract at Puncak Alam. AWC, through its wholly-owned subsidiary Qudotech Sdn Bhd, has accepted a Letter of Acceptance (LoA) from Gamuda Engineering Sdn Bhd to undertake subcontract works for the cold water, rainwater harvesting and sanitary system for a hyperscale data centre located at Eco Business Park V, Puncak Alam, Selangor. The contract is valued at RM42.3m on a fixed lump-sum basis and covers mechanical-related system works for two facilities within the data centre campus. The project commenced on 8 December 2025, with scheduled completion in February 2027 (Facility 1) and September 2027 (Facility 2).
Our Take. We view the award positively, as it strengthens Qudotech’s positioning in the data centre segment and supports earnings growth through 1QFY28. No material margin impact from SST is expected, as applicable taxes are typically factored into fixed lump-sum subcontract pricing. Assuming a 10% PBT margin, the contract is estimated to generate c.RM4.2m in PBT over its 21-month duration, equivalent to 12.1% of our FY26F PBT. Following this win, AWC’s outstanding order book increases to RM940.3m (2.3x FY25F revenue), providing solid medium-term earnings support.
Outlook. Johor has begun tightening approval criteria for new data centre developments, particularly with respect to water usage, as authorities seek to manage infrastructure constraints. Based on our channel checks, a 100MW data centre can consume c.4.2m litres of water per day for cooling, equivalent to the daily water usage of a city of around 10,000 people. We believe this shift favours Qudotech, given its established expertise in water management solutions, including cold water systems, plumbing and rainwater harvesting, which are essential for higher-specification, water-efficient data centre designs. Supported by repeat MEP and water-related works from Tier-1 contractors and Malaysia’s sizeable ~6GW data centre development pipeline, we expect demand for specialised MEP services to remain robust over the medium term.
Earnings revision. No changes to earnings forecasts, as the contract win is within our FY26F order book replenishment assumptions.
Valuation. Maintain our BUY recommendation with an unchanged TP of RM0.72, based on 9x FY26F EPS of 8.0 sen 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 | 4.071594 | 4.103148 |
| EUR | 4.788661 | 4.792351 |
| CNY | 0.580700 | 0.581157 |
| HKD | 0.523467 | 0.527018 |
| SGD | 3.153405 | 3.174965 |