Malaysia's data center boom presents a significant opportunity for the construction sector. The surging demand for IT capacity translates to billions in investments, fueling construction activity. This growth benefits established players and opens doors for contractors with specialized skills like IBS (Industrialised Building System). Early movers like Sunway Construction, Gamuda and IJM Corporation are capitalizing on this by delivering data centers faster and securing substantial contracts. As Malaysia positions itself as a regional data center hub, the construction sector is poised to be a key driver of this digital transformation.

Let's have a quick look on number of Data Center construction jobs won by these companies so far:

Sunway Construction: 3

Gamuda: 1

IJM Corporation: 0, 

More to come in second half for all three construction companies.

Return on Equity (ROE) is a vital metric when evaluating construction companies for investment. ROE reflects how well a company uses shareholder funds to generate profits. In the construction sector, a higher ROE compared to industry benchmarks suggests a company efficiently manages projects and capital. This translates to stronger profitability and potentially higher future returns for investors. It's important to consider ROE alongside other factors like PE and dividend yield for a well-rounded analysis.

ROE comparison of top 3 construction stocks:

Sunway Construction: 17.0%

Gamuda: 8.3%

IJM: 6.0%

Sunway Construction background:

Sunway Construction, a subsidiary of Sunway Group, is a major player in Malaysia's construction scene. Established in 1981, they've grown from a subcontractor to a leading construction conglomerate. They offer a wide range of services including building construction, infrastructure, and engineering. Notably, they possess expertise in precast concrete products and sustainable energy solutions. This positions them well for the growing data center industry in Malaysia, where fast and efficient construction is crucial. As the largest pure-play construction company in the country, Sunway Construction is a key industry player to watch.

Gamuda background:

Gamuda Berhad, a Malaysian engineering and infrastructure giant, has carved a niche for itself since its founding in 1976. They've transformed from a local company to a global leader, undertaking projects like the Klang Valley MRT lines and highway construction across continents. Gamuda is known for its innovative solutions, including the world-first autonomous tunnel boring machine (A-TBM) that enhances efficiency and safety. Beyond engineering, Gamuda Land, their property development arm, focuses on creating sustainable townships, adding another dimension to their expertise. This positions them well for data center development in Malaysia, requiring both construction prowess and an understanding of integrated spaces. As a major player in Malaysia's infrastructure landscape, Gamuda is a key driver of the country's digital transformation.

IJM Corporation background:

IJM Corporation, established in 1983, boasts a rich history in Malaysia's construction sector. It emerged from the merger of three local construction companies, aiming to compete effectively with larger foreign firms. Their focus on professional management and strong delivery capabilities has fueled their growth into one of Malaysia's biggest builders. IJM operates across four core businesses: Construction, Property, Industry, and Infrastructure. Notably, their 2008 acquisition of the Road Builder Group significantly boosted their infrastructure capabilities, adding major highways and ports to their portfolio. This positions them well for the data center boom, as it requires both construction expertise and infrastructure development. IJM's experience and diversified business approach make them a prominent player in Malaysia's ongoing development.