KUALA LUMPUR: Investors reacted positively to Gamuda Bhd’s latest RM1.8bil contract win in Australia.
Gamuda rose 0.94%, or nine sen to RM9.69 at 9.20 am. The counter has gained a whopping 111% so far this year.
Gamuda’s wholly-owned subsidiary in Australia, DT Infrastructure Pty Ltd has secured RM1.8bil (A$625mil) engineering, procurement and construction (EPC) to construct the 585MW Goulburn River Solar Farm in the Upper Hunter Region of New South Wales.
DT Infrastructure’s role in the delivery of the Goulburn River Solar Farm includes the civil, structural and electrical infrastructure required for the solar farm.
MIDF Research noted that Gamuda's outstanding order book has risen to RM31.8bil following the new contract secured by DT Infrastructure.
This figure aligns with the management's target of RM30bil to RM35bil by the end of CY2024.
MIDF said Gamuda remains on track to achieve its RM40bil to RM45bil target by the end of CY2025, factoring in an expected annual burn rate of RM12bil to RM13bil.
“Upcoming project awards that are expected to provide an extra boost to Gamuda’s already bulging order book include the Penang LRT, a water supply scheme in Sabah, and the potential conversion of several renewable energy early contractor involvement (ECI) into EPCC contracts in Australia,” it said.
“We are positive on Gamuda’s latest win through DT Infrastructure in Australia, and we believe both Gamuda Australia and DTI would be able to tap into the growing number of RE jobs down under.
“Management has recently guided that their tender book for Australia’s RE space was A$25bil over two years. Gamuda remains our favourite for the construction sector, backed by its successful overseas expansion plan; its consistency in clinching sizeable jobs and it is a front runner for most mega projects in Malaysia,” MIDF said, adding that it has maintained its “buy” recommendation on Gamuda with an unchanged target price of RM10.68.
Meanwhile, Kenanga Research remains bullish on Gamuda given its ability to secure new jobs.
“With this fifth job win in FY25, it has secured a total contract worth RM8.47bil year-to-date against our new job win assumption of RM14.5bil. This is also the second job bagged for DT Infrastructure in FY25.
“Although the pre-tax margin of 4%−5% is lower than Malaysian’s 10%, we are comfortable given its relatively low-risk profile. The project was awarded by Lightsource BP, a leading global solar energy company, fully acquired by BP in 2024,” it said.
“While this is not DT Infrastucture’s first rodeo in solar, it is Gamuda’s maiden solar farm win there (via DT Infrastucture), building up its credentials in renewable energy, following an earlier wind farm award in September. We stay optimistic on Gamuda on its job prospects and reaffirm our outperform rating with an unchanged target price of RM10.80,” Kenanga said.