KUALA LUMPUR: Kenanga Research is neutral on Gamuda Bhd
's successful tender for a 4.22 acre tract in Anchorvale, Sengkang, in Singapore as it has minimal impact to real net asset value (RNAV).
The research house maintained its outperform call on the counter with a target price of RM4.30.
Gamuda announced yesterday that the joint-venture bid between Gamuda Land and Evia Real Estate (8) Pte Ltd for the development of an executive condo project named Anchorvale Crescent for RM963mil had been successful.
"The bid was one of the closest wins in history, as GAMUDA and its JV partner won the bid by a slim differential sum of only SGD899.0 above the second highest bidder CNQC Realty (Treasure) Investment Pte. Ltd," said Kenanga.
It said it is long-term positive on Gamuda's move into the executive condo space in Singapore due to the resilience of demand for the type of property as it falls under the housing development board scheme.
Kenanga expects the project to start in 2020 at the earliest with an an estimated gross development value of about S$600mil.
"Currently, there are no details on the joint-venture structure but assuming 30-50% stake in the project, GAMUDA would need to fork out SGD95.7-159.4m or RM287.0-478.3m bumping up its net gearing of 0.55x (as of 3Q18) to 0.59-0.62x, which is still within our comfortable range of 0.5-0.6x."
On outlook, it said Gamuda's outstanding order-book and property unbilled sales stand at RM6.4bil and RM2.2bil, which gives it another two to three years of visibility.
"As of 9M18, property sales stood at RM2.6b and management remains ambitious in achieving its target of RM3.5b through sales from overseas projects, i.e. in Vietnam," it said.
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