CIMB Research said it expects Gamuda to secure more construction works from the Ulu Padas hydroelectric dam.
PETALING JAYA: Gamuda Bhd
is expected to deepen its involvement in the Ulu Padas hydroelectric dam project in Sabah, with further contract wins on the horizon as the state accelerates efforts to secure long-term water and energy security.
In its report, CIMB Research said: “We expect Gamuda to secure more construction works from the Ulu Padas hydroelectric dam.”
In addition to generating renewable energy, the research house noted that the dam is central to the Ulu Padas Water Supply Scheme.
The scheme is a large-scale infrastructure plan aimed at resolving Sabah’s persistent water woes.
Designed as a dual-purpose facility, the Ulu Padas dam will underpin a water supply system capable of delivering up to 6,000 million litres per day (mld) – enough to meet Sabah’s needs for up to 100 years.
A Bernama report dated April 16, 2025 highlighted that Phase 1 of the water scheme has been classified among 13 high-impact national projects currently in progress or completed.
The Borneo Post previously reported the water scheme will include a 350 mld treatment plant in Beaufort and 187km of pipelines connecting major population centres such as Kota Kinabalu, Kimanis, Kuala Penyu and Sipitang.
As part of these efforts, Sabah chief minister Datuk Seri Hajiji Noor is reportedly going to officiate the construction of a 300 mld treated water storage tank in Kinarut this April.
CIMB Research noted that during Gamuda’s recent results briefing, the company indicated it expects to secure RM4bil worth of water-related infrastructure works linked to the dam.
“The project is among several high-conviction bids collectively worth RM35bil that Gamuda is eyeing within the next two to three quarters.
“This suggests some upside risk to the group’s end-2025 outstanding order book target of RM40bil to RM45bil,” it added.
Gamuda, together with Conlay Construction in a 75:25 joint venture, was previously awarded a RM3bil contract to build the 188MW hydroelectric dam, slated for completion by end-2030.
The dam will produce an average of 1,052GWh of clean energy annually and support Sabah’s goal of lifting the renewable share of its energy mix to 35%.
The project is spearheaded by Upper Padas Power Sdn Bhd – a wholly owned unit of UPP Holdings, where Gamuda holds a 45% stake.
CIMB Research pointed out that its models have yet to factor in future recurring income from this stake, pending tariff updates.
Given Gamuda’s robust pipeline and strong financials, CIMB Research maintained a “buy” call with a target price of RM5.50 a share.
It cited undemanding price-earnings ratios of 13.7 to 16.7 times against the financial year ending July 31, 2026 to 2027; decent dividend yields of 3.4% to 4.2%, and a manageable net gearing position of 39%.
