SunCon Share Sell-Off, Investors Overreacting
The Malaysian Anti-Corruption Commission (MACC) recently arrested a SunCon contracts manager under an anti-graft operation known as Op Ways. The employee, suspended pending termination, allegedly received bribes in connection with subcontract awards. Management has clarified that the investigation is limited to the individual and does not implicate SunCon as a corporate entity. Analysts were briefed following the announcement and concluded that the incident is isolated, with no evidence of systemic failure within SunCon's governance framework.
According to MBSB Research, SunCon's internal controls remain robust, reinforced by its ISO 37001:2016 Anti-Bribery Management System certification obtained in May. The group's subcontract awards since 2022 have all been executed through e-bidding platforms that prioritise transparency and cost efficiency. The company has undergone recent audits by MRT Corp, Ernst & Young and SIRIM, all of which confirmed full compliance with its internal procedures.
RHB Research echoed similar sentiments, noting that SunCon's proactive stance in cooperating with authorities and engaging legal counsel underscores its zero-tolerance policy on corruption. The group has also initiated outreach to existing and prospective clients to mitigate any reputational damage and clarify the situation. Although RHB Research lowered SunCon's ESG score slightly from 3.3 to 3.1 due to governance-related adjustments, the research house maintained its confidence in the company's operational resilience and growth trajectory.
Both analysts agreed that the company's financials remain unaffected. MBSB highlighted SunCon's outstanding order book of RM7.90 billion as at May 2025, providing multi-year earnings visibility, particularly in the high-growth data centre segment. The group also stands to benefit from potential contract wins under upcoming infrastructure projects such as the Penang LRT, Penang International Airport expansion and MRT3.
While SunCon's share price dropped 8.2% to RM5.49 following news of the investigation, analysts see the selloff as a knee-jerk reaction. RHB Research noted that the stock is still trading below its historical P/E range observed during the previous construction cycle, suggesting further upside if sentiment recovers and new project wins materialise.
With no disruption to ongoing construction activities and a strong pipeline of internal and external tenders, both RHB and MBSB consider SunCon well-positioned to weather the current episode and continue delivering earnings growth into FY26. Related
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