en.Wedoany.com Reported - Malaysian research institutions expect that in the second half of 2026, over RM14 billion in public infrastructure construction contracts will be awarded, boosting the construction industry.

These potential projects include the Penang Light Rail Transit Packages 2 and 3, valued at approximately RM7 billion to RM8 billion; the Perak-Penang Water Supply Scheme, worth RM4 billion; and the Sungai Langat Water Treatment Plant Phase 2 Packages 1 and 2, valued at RM3.7 billion.

In its report, the research institution noted that these projects collectively offer over RM14 billion in potential contract opportunities. If awarded as scheduled, they will significantly boost order books.

The institution maintains an "overweight" rating for the construction sector, believing that private sector projects, especially data centers, will continue to drive contract replenishment and earnings visibility.

However, the institution stated that progress on public infrastructure projects remains relatively slow due to election-related uncertainties, and large-scale projects may face further delays due to fiscal and political uncertainties.

BIMB stated that the Elevated Autonomous Rapid Transit (e-ART) project, originally estimated to cost around RM10 billion, may see its scale reduced to RM6 billion to RM7 billion after optimization and negotiations. Additionally, the Mass Rapid Transit Line 3 (MRT3), valued at approximately RM31 billion, is also expected to face further delays.

The institution believes that as long as policy continuity is maintained after the Johor state election, the Johor Economic Transformation Plan will remain a long-term catalyst for the construction industry.

This plan includes water infrastructure projects supporting data center and heavy industry investments, the e-ART to alleviate traffic congestion in Johor Bahru, and the proposed East Coast Highway Phase 4 (LPT4) to improve transportation links in eastern Johor.

BIMB believes that Kimlun Corp Bhd (KL:KIMLUN) is an undervalued beneficiary stock, but the institution has not rated the stock.

Kimlun Corp is the only major listed contractor in Malaysia headquartered in Johor Bahru, with its own precast concrete production capabilities. The group also supplies precast concrete components for the Singapore MRT and deep tunnel sewerage system.

"Kimlun is expected to secure sub-contracts for parts of the e-ART, LPT4, and future water infrastructure projects, but these opportunities are unlikely to contribute to earnings immediately."