Affin Hwang maintains buy on Gamuda

KUALA LUMPUR: Affin Hwang Capital Research maintained its buy call on Gamuda Bhd as the construction counter's 1HFY18 result came within its and market expectations. 

"Net profit of RM414m (+26% yoy) in 1HFY18 comprised 51-52% of full-year consensus and our previous forecasts of RM803-813m. 

"Revenue jumped 44% yoy to RM3.47bn (pre-FRS 11), mainly driven by higher construction (+42% yoy) and property (+65% yoy) progress billings," it reported in its Monday research note.

The research firm also reported that Gamuda achieved strong property sales of RM1.9bil in the first hald of FY18 and full-year sales could exceed its initial target of Rm3.5bil in the year. 

Affin Hwang Research said works on the MRT2 is progressing well with 15% completion rate for the above-ground sectin and 20% for the underground section. 

Gamuda's remaining order book stands at RM6.9bil for main contractor works and about RM6.6bil for remaining project delivery partner works.

"We fine-tune our EPS forecasts to reflect the higher construction earnings and lower property earnings. 

"We reduce our RNAV-based TP marginally to RM5.85 from RM5.86 to reflect lower property segment valuation, which is partly offset by higher construction division valuation and the rolling over of the valuation base year to FY19E for our DCF forecasts," said Affin Hwang Research.