Gamuda set to hit high end of order book target


PETALING JAYA: Shares of Gamuda Bhd hit another record high yesterday, as its latest contract win took it nearer to its upper-end target of having a RM30bil to RM35bil order book for this year.

At 5pm, the stock closed 2% higher to RM8.65.

At present, the engineering, property and construction group has some RM31.5bil in project contracts and analysts anticipate Gamuda should hit its 2024 RM35bil order book target by clinching more work on infrastructure projects.

“The group will potentially exceed its RM35bil order book target by year-end, which we expect will come from the Penang LRT contract estimated to be worth RM4.56bil, based on Gamuda’s 60% stake in SRS Consortium,” MIDF Research said in a report on the company.

Last week, Gamuda’s wholly owned subsidiary Gamuda Engineering Sdn Bhd was also awarded a RM451.4mil contract by BCEI Malaysia Sdn Bhd to undertake the foundation, civil, structural and architectural work for a data centre in Cyberjaya.

Work on the project is scheduled to begin in the final quarter of this year (4Q24) and be completed in 1Q26. MIDF Research estimated the pre-tax profit margin on the project to range between 10% to 15%.

Meanwhile, CIMB Research said it believes Gamuda is poised to clinch additional water infrastructure work tied to the construction of the recently clinched Ulu Padas hydroelectric dam project, with total work there estimated to have a combined value of RM5bil.

The research house added other major prospects include the Phase 1B of the Pan Borneo Sabah Highway and Sarawak’s Northern Coastal Highway projects.

“Leveraging its expertise in handling bulk water infrastructure, we also expect Gamuda to emerge as a frontrunner for the RM4bil Sungai Perak raw water transfer scheme, one of the standout projects under Budget 2025,” the research house said.

CIMB Research believes Gamuda could also gain from additional metro railway works worth RM8.1bil for the new Taipei City government within three years, and building on the RM3.2bil Xizhi Donghu MRT job, also in Taiwan, that was awarded to the group in October.

It stated Gamuda is also in the running for the Sydney Metro West line-wide package and is working hard to convert some of its renewable energy (RE) bids, which includes a multi-billion Australian dollar pump-hydro project and several solar and wind farm bids through its wholly owned Australian unit DT Infrastructure Pty Ltd (DTI).

“This renewed push for RE jobs has started to bear fruit, with the appointment of DTI as contractor for the A$243mil Boulder Creek wind farm in Queensland back in late September,” the research house said.

CGS International Research (CSGI Research), meanwhile, expects improving margins for Gamuda as local projects contribute 31% of its total order book of RM31.4bil, with foreign projects in Australia, Taiwan and Singapore making up the remaining 69%.

The research house forecasts the local portion should rise to 45% by December with the Penang LRT project award.

It reiterated its “add” call on the stock with a target price of RM10 a share.

CIMB Research also kept its “buy” call on Gamuda with a higher target price of RM10.20 per share despite cutting its forecast for Gamuda’s financial year 2025 (FY25) core profit by 2.6% to RM1.2bil, due to the currency-exposure risk from its overseas order book. It however lifted the group’s FY26 forecast by a marginal 0.2%.

MIDF Research maintained its target price for Gamuda at RM9.64 per share, with the valuation derived by pegging Gamuda’s FY26 earnings per share of 52.1 sen to a price-earnings multiple of 18.5 times.

“The group remains our favourite for the construction sector, backed by its successful overseas expansion plan; its consistency in clinching sizeable jobs and its being a front runner for most mega projects in Malaysia.

Being a premium builder of data centres, the group now focuses only on hyperscale data centres, underpinning sizeable order book replenishments,” MIDF Research said.

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