SunCon brushes off corruption concerns, reaffirms growth outlook
In an investor briefing led by group managing director Liew Kok Wing, SunCon firmly dismissed concerns over its operational integrity and future prospects.
The company clarified that the case involves a single contract manager and a few subcontractors – not the company itself. It stressed that the incident is isolated and that SunCon is fully cooperating with the authorities, according to a research note by Maybank Investment Bank (Maybank IB).
The employee has been suspended and will be terminated after the remand period, SunCon confirmed.
SunCon also reported that it has been in active communication with clients to explain the situation. So far, responses have been supportive, and the group does not expect any disruption to its ongoing projects, Maybank IB said.
To further strengthen investor confidence, SunCon highlighted that it obtained Anti-Bribery Management Systems (ABMS) certification just two months ago. The certification was audited by SIRIM and external parties, reinforcing the group's governance credentials. It also reaffirmed that subcontracting tenders are conducted electronically and awarded strictly based on the lowest bid among local companies.
"It believes its standard operating procedures (SOPs) are sound and the aforementioned case involved just that 1 employee. SCGB revealed that it conducts subcontracting tenders electronically and only awards to local companies that offer the lowest bid," Maybank IB said.
While acknowledging some reputational impact, SunCon believes the long-term outlook remains intact.
"At the very least, it does not expect its existing projects to be affected. SunCon stated that its clients have been receptive of its explanation. Given SunCon's explanation, we believe there should not be too many negative repercussions over time once the case is settled, though there may be near-term distractions," Maybank IB said.
The research house reaffirmed its "BUY" recommendation on SunCon, maintaining a target price of RM6.72, premised on a 24x fiscal year 2026 price-to-earnings ratio and anchored by annual job win expectations of RM7 billion.
The stock was among the most actively traded in the morning session, with over 11.69 million shares changing hands.
As of 10.24am, the stock fell to an intraday low of RM5.29, down 20 sen or 3.6 per cent from Monday's close of RM5.49.
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