CGSI Research said the company may exceed its new orders forecast for financial year 2025 of RM25bil by as early as year-end.
PETALING JAYA: Engineering and construction company Gamuda Bhd
has strong potential to clinch RM25bil in new orders by the end of the year, analysts say.
CGS International Research (CGSI Research) said one of the key takeaways from a meeting with the company’s management last week was that it may exceed its new-orders forecast for financial year 2025 (FY25) of RM25bil by as early as year-end, with year-to-date wins already at RM9bil.
“Our FY26 forecast earnings per share, which is 11% above Bloomberg’s consensus, reflects our more aggressive new order book replenishment assumption of RM16bil for FY25.
“We think Gamuda’s order book may hit RM34bil by December 2024, assuming a burn rate of RM2.5bil per quarter.
“In our view, likely local wins are Penang Light Rail Transit project, with Gamuda’s share at 60% or about RM5bil, and the Upper Padas hydroelectric power plant and water treatment plant in Sabah worth RM7bil-RM8bil. In Australia, the Suburban Rail Loop (SRL) East second package will be awarded soon.
“Gamuda and its partner are one of two parties shortlisted and management said the outcome looks positive. This is its first potential win in Victoria and may pave the way for other bids there, such as a large SRL systems package,” it noted.
The company’s management also highlighted that Gamuda has taken a more opportunistic approach to data-centre projects and has recommissioned its second industrialised building system plant.
Capacity for data-centres would take precedence over internal property projects, the research house said.
“We expect Gamuda to show better earnings in the second half of FY24 but this hinges on the variation orders (VOs) for its Sydney Metro West-Western Tunnelling package.
“If the VOs are not signed by July 24, recognition will be in FY25. Third quarter FY24 results will be driven by recognition for its three Australian projects and lumpy recognition for its Singapore OLA executive-condominium project.
“The first phase of its recently launched Eaton Park development in Ho Chi Minh City, with a gross development value of RM1.2bil, was sold out during the weekend of its launch, a strong sign of pent-up demand for the right products, in our view,” the research house noted.
