PETALING JAYA: Gamuda Bhd
is on track to achieve its cumulative job replenishment target of RM25bil for financial years 2024 and 2025.
This followed its latest contract win to undertake a high-capacity signalling project for the rail network in Perth, Australia.
The contract was secured by the construction giant Australian unit DT Infrastructure Pty Ltd (DTI), via AD Alliance, which is a joint-venture with French rail transport giant Alstom.
“We are positive on the latest development. This is Gamuda’s fifth major contract win in FY24, bringing its year-to-date contract wins to between RM13.3bil and RM13.8bil against its job win target (which is also our assumption) of RM25bil over two years,” Kenanga Research said.
It added that out of the five contract wins, only Taiwan’s Kaohsiung MRT Yellow Line (worth RM3bil) and Singapore’s MRT West Coast Station and Tunnels (worth RM1.8bil) are confirmed with contract value. Meanwhile, the civil work contracts for Upper Padas Hydroelectric Power Plant (estimated at RM2bil), Penang LRT Mutiara Line (estimated at RM4.6bil to RM5bil) and HCS project are still under negotiation.
The research house is keeping its RM6.20 target price on the stock, which values its construction business at 18 times FY25 price-earnings (PE).
Meanwhile RHB Research noted that DTI is no stranger to projects related to signalling, communications, and system integration as it had secured a A$6mil job for signalling and communications services for V/Line Corp.
As of end-January, DTI’s projects consisted of RM4.6bil or 19% of Gamuda’s RM24bil outstanding order book. Based on its estimates, Gamuda has secured RM6bil worth of new jobs (including DTI) for FY24.
It said Gamuda’s current valuation at 14 times FY25’s PE is undemanding as the stock had traded around 16 times PE in mid-2017 during the construction upcycle when its order book was only at RM7.8bil versus RM24bil now.
