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SunCon: Sustainable Growth, But Will ROE Catch Up?

Sunway Construction Group Berhad (SunCon) is Malaysia’s leading integrated construction and engineering group. Its vertically integrated model ensures cost efficiency and quality, particularly in complex projects.

A key strength is its early shift toward sustainability. Through its Sustainable Energy Services division, SunCon delivers solar, district cooling, and energy-efficient infrastructure. SunCon also embeds digitalisation and circular economy practices to cut waste and enhance ESG performance.

It has evolved from a traditional contractor into a future-ready partner focused on sustainable, smart, and energy-efficient infrastructure.

While this changes has driven revenue to double from 2019 to 2024, ROE only grew by 8%. 

Part of this was due to margin compression. For example, gross profit margin decreased from 21% in 2019 to 14% in 2024. Another reason was the increase in the capital to fund the growth. Total equity increased by 30% over the same period.

Given this picture, you should not be surprised to find Suncon been mapped onto the border of the Gem and Quicksand quadrants in the Fundamental Mapper.

Can the declining ROE be turnaround? The potential for SunCon’s ROE to improve depends on its shifts toward higher-margin, value-added projects like green buildings and energy infrastructure.

Recurring income from solar and district cooling assets will also enhance earnings without significantly increasing equity. At the same time, digital tools and cost-efficiency measures could drive margin recovery. With capital intensity stabilizing, these developments could led to a gradual but sustainable ROE uplift. Only time will tell.