RHB Research said re-rating catalysts would be faster-than-expected job wins in Australia and an unchanged price tag for the MRT3 tunnelling package in Malaysia.
PETALING JAYA: RHB Research expects Gamuda Bhd
to post a core profit of RM200mil to RM220mil for the second quarter of financial year 2024 (2Q24).
This could possibly translate into a 3% to 13% quarter-on-quarter and year-on-year growth respectively for the construction group, the research house said.
“Better progress billings from its overseas projects, particularly the Sydney Metro West, are expected to underpin the performance for 2Q24,” it said in a report yesterday.
The research house continues to favour Gamuda for the group’s sizeable overseas exposure while maintaining relevance in the domestic market via the Mass Rapid Transit 3 (MRT3) tender submitted and the Upper Padas Hydroelectric Dam.
Gamuda’s wholly-owned subsidiary in Australia, DT Infrastructure (DTI), recently won the early works contract from Aula Energy for the 372 MW Boulder Creek Wind Farm (onshore) in central Queensland, Australia.
“Based on an assumption of A$1.6mil cost per MW installed, we estimate the project to cost about A$600mil.
“As for the early works contract awarded to DTI, we estimate it at A$2mil to A$5mil.
“This assumption was benchmarked on the A$20mil early works contract awarded to Cimic Group’s UGL and CPB Contractors for the A$5bil 1,000km transmission line project (CopperString in Queensland),” RHB Research said.
Looking ahead, Gamuda has been shortlisted for four projects – the second tunnelling package for Suburban Rail Loop (SRL) East (Glen Waverley to Boxhill) estimated at A$2bil to A$4bil, a highway in Melbourne, a line wide package for SRL metro, and a potential extra Sydney Metro West Station in Rosehill.
“Therefore, Gamuda is on track to hit its RM25bil job replenishment target over FY24-FY25,” the research house said.
RHB Research also expects further prospects for Gamuda in Australia as the country requires around 10,000km of transmission lines.
“As such, Gamuda via DTI or its Australian subsidiary Gamuda Engineering Pty Ltd may in the future form joint ventures with relevant partners to leverage on renewable energy zones and transmission grid pipelines, worth over A$35bil, in New South Wales alone.”
RHB Research, which made no changes to the group’s earnings estimates, has kept a “buy” call on the stock with a target price of RM6.46.
The research house said the re-rating catalysts would be faster-than-expected job wins in Australia and an unchanged price tag for the MRT3 tunnelling package in Malaysia.
Potential job wins on the domestic front may come from the Bayan Lepas Light Rail Transit and Phase 1B of Pan Borneo Highway Sabah, it added.
