KUALA LUMPUR: Shares in Gamuda Bhd
rose on Friday following news that its joint venture (JV) had secured a A$1.6bil (RM5bil) rail systems upgrading project in Perth, Australia.
The share had ticked three sen or 0.3% higher in the afternoon trading session on Thursday after the job win was announced. On Friday morning, investors continued to buy up the conglomerate's share price to a high of RM8.46 a share, representing a gain of 18 sen or 2.18%.
As at 9.25am on Friday, the share price had eased to RM8.30.
Investor reaction to the contract, while positive, was tempered as observers had been expecting Gamuda to ink the deal with the Public Transport Authority of Western Australia since April, when the authority announced that Gamuda's JV with Alstom Transport Australia, dubbed the AD Alliance, was the preferred choice of the project.
Gamuda's unit, DTI Infrastructure, has a 46% share in the alliance, which gives it an effective contract value of A$737mil (RM2.3bil) over the 10-year duration of the contract from 2H24.
Hong Leong Investment Bank (HLIB) Research maintained its "buy" call and target price of RM9.68 on Gamuda as the job win was within its RM13bil job replenishment assumption for the year.
"We anticipate another potential job win by the end of FY24F, from the finalisation of the construction value for the Upper Padas Hydroelectric Dam (estimated at RM2-3bil).
"Another potential job win by end FY24F is a package under the Phase 1B of Pan Borneo Highway Sabah, which has seen about four packages already awarded out of the total 19 job packages," it said in a note.
It added that other potential job wins within the next six months include the Penang Light Rail Transit Segment 1 (about RM4.8bil for Gamuda’s 60% share in SRS Consortium), and the water supply scheme for the Upper Padas Hydroelectric Dam (estimated to be at least RM4bil), among others.
TA Securities Research said in its update, it maintained its "buy" call on Gamuda with an unchanged target price of RM9.94.
MIDF Research, which reiterated its "buy" call, has put its target price of RM7.50 under review. It said in a note Gamuda remains its peferred stock for the contruction sector.
