Gamuda’s outstanding order book currently stands at a high of RM37bil.
PETALING JAYA: Gamuda Bhd
is fast emerging as a key water infrastructure player in Malaysia, which puts the group in a strategic position to clinch more water-related projects moving forward, say analysts.
The group’s latest exclusive agreement with Lembaga Kemajuan Negeri Perak (PKNPk) is to develop the Sg Perak Raw Water Transfer Scheme (SPRWTS) is aimed at resolving acute water shortages in northern Perak.
This scheme involves facilitating the transfer of raw water from Sungai Perak to Bukit Merah, and developing the requisite infrastructure for treated water distribution, ensuring long-term water sustainability for the region.
MIDF Research, which is positive on Gamuda’s new job said “further details such as the official joint-venture (JV) arrangement and contract award are expected in later stages.
“While there is no indicative project size currently, we understand that Gamuda rarely undertakes domestic projects under RM1bil, therefore we expect this project to be able to replenish a sizeable portion of its order book.”
Gamuda’s outstanding order book currently stands at a high of RM37bil, which is well within its management’s target of RM40bil to RM45bil by end-2025, said the research house in a note to clients yesterday.
Furthermore, the upcoming project awards that are expected to provide an extra boost to Gamuda’s already bulging order book include a water supply scheme in Sabah, and the potential conversion of several renewable energy early contractor involvement into engineering, procurement, construction and commissioning (EPCC) contracts in Australia and data centre jobs. According to MIDF Research, Gamuda remains its favourite for the construction sector, backed by its successful overseas expansion plan, its consistency in clinching sizeable jobs and it being a front runner for most mega projects in Malaysia.
Hence, the research house has maintained a “buy” call on the stock with an unchanged target price (TP) at RM5.42 a share.
“We believe is justifiable given its growing prospects in the construction space with an all-time high outstanding order book and its recent inclusion into the FBM KLCI,” added MIDF Research.
Meanwhile, RHB Research in a report said Gamuda is making a splash in Perak via its exclusive agreement with PKNPk for the water-related project in the state.
“Although no potential contract value and rough timeline was mentioned, but in June 2024, the government agreed in principle to approve an estimated allocation of RM4bil for the implementation of the raw water transfer project from Sungai Perak to the Bukit Merah Dam in Kerian, part of which will be used to supply treated water to Penang.
“Budget 2025 also highlighted this project,” added the brokerage firm.
RHB Research noted that it foresee minimal execution risks to the new project due to Gamuda’s track record in water projects namely the Sungai Selangor Water Supply Scheme Phase 3, including the water treatment plants in Rasa and Bukit Badong together with the Stormwater Management and Road Tunnel.
Gamuda is also currently involved in the Sungai Rasau Water Supply Scheme Stage 1 and the EPCC contract of the Ulu Padas Hydroelectric project.
“These projects have a cumulative value of at least RM6bil,” said RHB Research.
It has kept a “buy” call on Gamuda with a TP of RM5.83 a share.
CIMB Research in a report said “assuming a contract value of RM4bil, we estimate that the SPRWTS project could potentially bump up Gamuda’s outstanding order book by about 11% to RM41.1bil.”
It added this is well within the group’s end-2025 target of RM40bil to RM45bil and would account for 20% of the research house FY26 forecast new order book assumptions for Gamuda.
“Additionally, we believe that the group is well-positioned to secure water-related infrastructure works worth RM3bil to RM4bil for the Ulu Padas Hydroelectric Dam by end-February 2025, having already clinched a 75% share in the construction of the 188 megawatt Ulu Padas hydroelectric power plant.
CIMB Research has maintained a “buy” call on Gamuda with an unchanged TP of RM6 a share. Gamuda’s share price went up by nine sen yesterday, or 2.05%, to close at RM4.47. There were 22.3 million shares traded.
