PETALING JAYA: Gamuda Bhd
is expected to clinch at least RM10bil worth of jobs annually, to post a three-year earnings compound annual growth rate of 16%, says RHB Research.
“Assuming an order book burn rate of RM5bil between July and December, with a balance order book of between RM22bil and RM24bil as of June, Gamuda needs RM11bil to RM13bil in new wins to reach its RM30bil target order book by end-2024,” the research house added.
It said among the potential job wins within the next six months include Penang Light Rail Transit Segment 1, valued at RM4.8bil based on Gamuda’s 60% share in SRS Consortium.
Other potential contract wins are the Upper Padas Hydroelectric Dam worth between RM2bil and RM3bil and water supply scheme for it, valued at least RM4bil and high capacity signalling project for DT Infrastructure worth at least A$500mil.
“Additionally, Gamuda may potentially clinch another data centre job in FY25, as its industrialised building system factories can accommodate two to three data centre jobs with a total capacity of 200 megawatt at one go,” RHB Research added.
RHB Research raised its FY25 to FY26 earnings by 8%, each backed by anticipated gradual margins improvements for its construction arm on higher volume of incoming domestic jobs with better margins.
“We tweak our property sales recognition trends too amid better prospects, particularly for Gamuda’s local township projects, such as Gamuda Gardens (Rawang in Gombak District) and Gamuda Cove (Kuala Langat District) – both districts have seen growth in residential property transactions to the tune of 11% and 45% year-on-year in the first quarter of 2024,” it added.
The research house maintained a “buy” recommendation but with a higher target price of RM9.68 from RM7.69 previously.
“We reaffirm our view that Gamuda remains undervalued – it is trading at 18 times FY25 price earnings, which is not far from the 16 times seen during the 2017 upcycle when the outstanding order book was just RM7.4bil versus RM24bil now,” it said.
