KUALA LUMPUR: Gamuda Bhd
’s shares declined in early trade on Monday, despite securing a RM702mil contract in Australia, amid a weak broader market.
The engineering and construction group fell five sen, or 0.62% to RM8.05 at 10.36 am. The counter has risen over 75% so far this year.
Gamuda’s wholly-owned Australian subsidiary, DT Infrastructure Pty Ltd (DTI), has bagged a A$243mil or RM702mil contract for the design and construction of the Boulder Creek wind farm project in Queensland.
The award – the first wind farm project for DT Infrastructure – was awarded by equal owners Aula Energy Holdings Pty Ltd and CS Energy Ltd.
Philip Capital estimated this project will yield a 4–5% profit before tax (PBT) margin, in line with the margins for small-scale overseas construction projects, translating to circa RM35mil PBT over FY25–27E.
“This marks Gamuda’s first contract win for FY25, bringing the latest order book to c.RM26bil, or 2.5x FY24 construction revenue. In addition to this win, Gamuda is a step closer to achieving its RM30–RM35bil order book target by the end of CY24.
“We estimate that Gamuda needs to secure an additional c.RM14bil in new contracts to reach this target order book,” it said.
The research house expects future order book replenishment to mainly come from local projects, including the Penang LRT (c.RM5bil), Upper Padas Hydro (c.RM3bil), Sabah water treatment plant, and other data center projects (c.RM3bil).
“We understand that Gamuda is in advanced discussions on various Australian renewable projects, including solar, wind, and hydro, and is the sole bidder for several of these projects,” Philip said.
It has maintained its “buy” rating on Gamuda and its SOP-derived target price is unchanged at RM9.20.
According to MIDF Research, the latest win brings Gamuda’s outstanding order book to RM25.5bil.
The research house reiterated from its previous report that management has provided a more optimistic outlook on the order book, projecting it could reach RM30bil to RM35bil by the end of CY24, up from the earlier guidance of RM30bil.
It said Gamuda has a “relatively high certainty” of securing RM10bil to RM15bil of new projects in the next two quarters (by Jan-25).
MIDF said Gamuda’s,anagement expects the order book to grow to RM40bil-RM45bil by CY2025, after considering an estimated burn rate of RM12bil to RM13bil annually.
“We maintain our target price at RM9.01 as we peg Gamuda’s FY26F EPS of 52.1 sen to a PER of 17.3x, based on +1SD above its 10-year mean.
“We are positive on the wind farm project secured by DTI, which lifts Gamuda’s order book to a new high. Gamuda remains our favourite for the construction sector, backed by its successful overseas expansion plan; its consistency in clinching sizeable jobs and it being a front runner for most mega projects in Malaysia,” MIDF said.
