CIMB Securities said the group will also bid for the upcoming systems package.
PETALING JAYA: Gamuda Bhd
remains the best proxy for exposure to the Penang Light Rail Transit (LRT) that is set to take off this month, according to CIMB Securities Sdn Bhd.
SRS Consortium, which is 60%-owned by Gamuda, was offered the first package (Mutiara Line civil infrastructure works) under a single-sourcing request for proposal last March.
“Based on our preliminary estimates, a 60% share of the RM8bil contract would lift Gamuda’s outstanding order book for year-to-date financial year 2025 forecast by 72% to RM11.5bil.
“In addition, the group will also bid for the upcoming systems package,” the research house said in a report yesterday.
Another company poised to benefit from the Penang LRT project is Malaysian Resources Corp Bhd (MRCB), as the implementation of the cross-channel link would bolster the development potential of MRCB’s Penang Sentral. The latter is the key transport hub for the northern region of Peninsular Malaysia.
“Likewise, accessibility to IJM Corp Bhd’s The Light Waterfront will be enhanced by two proposed stations along the Mutiara Line, one on either side of the waterfront development,” the research house pointed out.
Further, Econpile Holdings Bhd, a proven name for deep substructure and piling services, will also likely see gains from the development as the entire Penang LRT system will largely be built on an elevated structure.
“Ann Joo Resources Bhd has an edge over its rivals in meeting the steel requirements for the project, as its main steel facility is strategically located in Seberang Prai (about six km from Penang Sentral and a four-minute drive from Penang Port),” the research house said.
The much-awaited Penang LRT project is set to take off this year with the groundbreaking ceremony for the Mutiara Line scheduled to commence at Bandar Sri Pinang on Jan 11, 2025.
A first for Penang, the entire urban rail project is slated for completion by 2030 and is expected to cost over RM10.5bil.
Civil infrastructure works for the Mutiara Line, which represents the first segment of the Penang LRT project, spans 29km, features 21 stations and is estimated to cost about RM8bil.
Twenty of the Mutiara Line stations will be located on Penang Island and the man-made Silicon Island, with one situated at Penang Sentral on the mainland.
“The Mutiara Line alignment starts from Silicon Island and extends northwards through key locations, including the Penang International Airport, Free Industrial Zones, Setia SPICE Arena and Komtar.
“Silicon Island is currently being developed via a joint venture between SRS Consortium and state-backed Penang Infrastructure Corp,” the research house said.
In early December last year, reclamation works for a section of Silicon Island that will house the Mutiara Line Depot – a cornerstone of Penang’s ambitious transportation network – reached two ha.
The entire 24-ha area reserved for the depot is scheduled to be reclaimed by the end of this year.
CIMB Securities maintained an “overweight” call on the construction sector with Gamuda, IJM and MRCB remaining as its top picks.
