AWC Secures RM26.14m Shah Alam Hospital Extension

AWC Bhd has secured a one-year RM26.14 million contract extension for Hospital Shah Alam, reinforcing its entrenched position in Malaysia’s healthcare support services. The extension, awarded via subsidiary Ambang Wira Sdn Bhd, builds on AWC’s decade-long incumbency at the hospital since its inception in 2016. Notably, the annualized run rate of RM26.14 million exceeds the prior five-year average of RM21.58 million, reflecting inflationary adjustments and higher wage costs ahead of a new long-term tender.

AWC Bhd: Momentum

From a financial perspective, applying a conservative 4% PBT margin, the extension is expected to contribute approximately RM1.05 million in profit before tax, equivalent to 3.6% of the group’s FY26F PBT forecast of RM29.5 million. While modest, the uplift underscores the predictability of AWC’s Facilities division, which remains the group’s anchor, contributing ~50% of 1HFY26 revenue. The division’s strong momentum—evidenced by a 154.3% QoQ PBT jump in 2QFY26—will be further supported by this extension.

Order book

AWC’s order book now stands at RM910 million, with Facilities accounting for RM465 million. Upcoming projects such as TM Data Centres, Kompleks E, and Masjid Putra, alongside the Shah Alam extension, provide multi-year earnings visibility. Meanwhile, the Environment division’s RM224 million backlog and Singapore’s PWCS pipeline rollout offer structural support, though Middle East softness remains a risk amid Iran-related geopolitical tensions.

Valuation-wise, AWC is upgraded to BUY with an unchanged TP of RM0.60, pegged to 9x FY26F EPS of 6.6 sen. The stock trades at 7.8x FY26F P/E, supported by a clean balance sheet, predictable cash flows, and a three-star ESG rating. Risks include concession rate renegotiations, Middle East delays, and margin resilience in Rail.

Photo: AWC

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