· AWC's wholly-owned Qudotech Sdn Bhd has secured a RM39.7m subcontract from Gamuda Engineering for water and fire services at a hyperscale data centre in Bandar Spring Hill, Port Dickson.
· We view the win positively. It is Engineering's second data centre win in FY27 (RM62.8m) and third in CY26 (RM85.0m). The new award lifts Group order book to c.RM900m, or c.2.0x FY26 revenue.
· Assuming a c.12% PAT margin, the contract should generate c.RM4.8m PAT over c.14 months. About c.RM3.5m falls in FY27F, or c.12% of our FY27F core net profit of RM30.1m.
· We raise FY27F/FY28F earnings by 2.4%/2.2% as we lift our FY27F Engineering order book replenishment assumption to RM89.1m (from RM62.3m), with YTD wins of RM62.8m already exceeding the previous target. Maintain BUY with a higher sum-of-the-parts TP of RM1.25 (from RM1.22).
Secures RM39.7m Data Centre Subcontract. Qudotech Sdn Bhd (Qudotech), AWC's wholly-owned subsidiary, has signed a subcontract with Gamuda Engineering Sdn Bhd (Gamuda) for a hyperscale data centre at Bandar Spring Hill, Port Dickson. The RM39.7m contract covers cold-water, rainwater harvesting, water reticulation, fire hydrant and sanitary works. Preliminary works began on 14 Aug 2026, so the contract should contribute from 1QFY27 until completion on 22 Oct 2027.
Our View. We view the win positively, as Gamuda’s repeat awards are stacking up. This is its third data centre subcontract to AWC, following previous awards for Rawang (RM19.9m) and Puncak Alam (RM42.3m). Repeated awards from a tier-one main contractor solidify Qudotech’s status as an established vendor in Gamuda’s subcontract space, not a one-off. As these projects roll out in phases, follow-on packages at the same sites could follow. The 14-month timeline also converts into earnings faster than AWC's long-dated concessions.
Assuming a c.12% PAT margin, we estimate c.RM4.8m PAT over the contract life, with c.RM3.5m estimated to be recognised in FY27F, or c.12% of our FY27F CNP of RM30.1m. Including this win, AWC's order book rises to c.RM900m (c.2.0x FY26 revenue), from c.RM860.5m in our last note. Engineering's order book rises to c.RM202m, from RM139.2m as at end-4QFY26, after including the RM23.1m Aug-2026 award and this contract.
Outlook. Engineering is now the Group's clearest near-term growth driver, as data centre jobs convert into earnings within one to two years. The Environment segment remains the key swing factor, as its pivot towards India has begun to bloom as seen in AWC’s recent RM13.1m contract in GIFT City amid continued geopolitical disruption in the Middle East. Meanwhile, Facilities' IFM contracts continue to anchor recurring income.
Earnings Revision. We raise our FY27F/FY28F core net profit forecasts by 2.4%/2.2% to RM30.1m/RM37.6m. As FY27’s total YTD Engineering orderbook wins of RM62.8m has exceeded our assumption of RM62.3m, prompting us to revise our assumptions upward to RM89.1m as we expect more orders to follow with eight months remaining in the financial year.
Valuation. We maintain our BUY recommendation with a higher sum-of-the-parts TP of RM1.25 (from RM1.22, fully diluted), alongside a three-star ESG rating. We value Engineering at 15x, Environment at 13x, and Facilities and Rail at 7x each, all on FY28F earnings. We continue to like AWC for its (i) two independent entry points into the data centre theme via Engineering and Facilities, (ii) early traction on the India smart-city pivot, and (iii) predictable cash flows from long-term concessions.
Risks. Delays in project execution or completion; rising material costs eroding margins on a fixed lump-sum contract; slower-than-expected data centre investment in Malaysia; reliance on a small pool of main contractors for new awards.
Disclaimer
The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.
Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.
Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.
| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.065852 | 4.097386 |
| EUR | 4.566831 | 4.570330 |
| CNY | 0.609540 | 0.610006 |
| HKD | 0.518562 | 0.521946 |
| SGD | 3.173015 | 3.194586 |