CIMB Securities Research pointed out that Gamuda’s robust tender book indicated its growing pipeline of data centre prospects.
PETALING JAYA: Gamuda Bhd
’s outstanding order book will likely exceed RM30bil by the end of this year, following its recent job win in Sabah.
The anticipation is backed by a slew of promising job prospects, including the Penang light rail transit or LRT, as well as new data centres, according to CIMB Securities Research.
The research house noted that apart from the Ulu Padas hydroelectric project in Sabah, which the construction and infrastructure group secured recently, there are several potential projects from the Pan Borneo Sabah phase 1B and Northern Coastal Highway.
In Australia, the group is awaiting the tender outcome from the northern section of Melbourne’s North East Link via a joint venture with John Holland and Jacobs.
“Gamuda also expects the mass rapid transit three project to proceed, although the window to start it may hinge on further reforms to fuel subsidy schemes, which may provide the government with sufficient fiscal headroom to commit to the project,” it said.
“Looking into 2025, Gamuda is also keeping an eye on the RM4bil Perak-Penang water project,” it added.
CIMB Securities Research maintained its “buy” call on Gamuda, with an unchanged sum-of-part-based target price of RM9.30.
It noted that Gamuda remained its preferred pick for exposure within the large-cap construction space, adding that the stock is trading at undemanding 2025 and 2026 forecast price-earnings of 16 times and 14 times, respectively.
The group is backed by a healthy balance sheet, with net gearing at 35% as of April 30, 2024.
It pointed out that Gamuda’s robust tender book indicated its growing pipeline of data centre prospects.
“After securing RM2bil worth of data centre jobs year-to-date, we opine that Gamuda is in a solid position to land two more data centre-related jobs from a new client by year-end,” it said.
“By the first half of 2025, the group is aiming to secure larger data centre orders from a mixture of old and new clients.
“Moreover, the group is looking to expand its data centre coverage beyond the Klang Valley, especially for time-sensitive clients that would be paying higher transportation costs,” it added.
To address capacity bottlenecks, the research house noted that Gamuda would expand the open yard space at its Industrialised Building System (IBS) plant in Sepang by October 2024.
“This is to accommodate additional work using traditional pre-cast methods, which typically produce a quarter of Gamuda’s data centre components (the balance 75% is produced through automated production lines at its two IBS facilities),” the research house pointed out.
“With the expanded IBS facilities, Gamuda estimates that it would be able to take up to RM4bil worth of data centre orders at one time,” it added.
