Gamuda's share price up after posting record Q1 earnings

KUALA LUMPUR: Gamuda Bhd's shares on Bursa Malaysia rose this morning following its announcement of an all-time high net profit of RM1.17 billion in the first quarter ended Oct 31, 2022 for the financial year 2023 (Q1 FY2023).

At 10.32 am, the counter rose by four sen to RM3.65 with 1.39 million shares changing hands.

MIDF Research said Gamuda’s outstanding construction order book remains at a record high of RM14.8 billion, giving it earnings visibility up to FY2026 or FY2027, mainly from overseas jobs.

"The overseas jobs, which is now at RM11.6 billion or 78 per cent of its order book, out of which RM8 billion is from Australia. The group also has RM2.1 billion worth of jobs in Taiwan and RM1.5 billion in Singapore and the remaining RM3.2 billion in Malaysia.

"We are fairly confident that the company is able to hit the target of securing RM25 billion worth

of new jobs in two years. Gamuda’s tender win rate is about 40 per cent," it said in a research note today.

It said Gamuda has set its sights on going huge in Australia, aiming to go it alone for projects in

the land Down Under in the long term.

While MIDF Research had initially projected a slight drop in Gamuda’s earnings due to the disposal of its toll concessions, it seems that this would quickly be replaced by its stronger construction and property earnings, it said.

Meanwhile, CGS-CIMB Securities Sdn Bhd is positive that Gamuda would be focusing on the renewable energy (RE) space as its new growth area (RM2 billion targeted capital expenditure).

It said the recent acquisition of a 30 per cent stake in ERS Energy Sdn Bhd is strategic to pursuing new hydro and solar energy engineering procurement construction and commissioning (EPCC) projects with potential recurring income and targeted equity internal rate of return (IRRs) in the mid-to-higher teens (domestic and overseas).

After all considerations, MIDF Research and CGS-CIMB maintained the 'buy' call on Gamuda with their respective target prices of RM4.67 and RM4.69. - Bernama