PETALING JAYA: TA Research has slashed its earnings forecasts for Gadang Holdings Bhd
amid lower expectation of new contract wins.
In a note, the research house reduced the earnings estimates for the financial year 2025 (FY25) by 1.6%, followed by FY26 (26.7%) and FY27 (6.8%).
“Reflecting the absence of new job wins in FY25 and a slower-than-expected replenishment rate, we have revised our new job assumptions for FY26–FY27 lower from RM500mil to RM300mil per annum.”
Following the earnings revision, TA Research also cut its target price for the stock to 22 sen from 28 sen.
Given the negative risk reward profile, Gadang’s rating was also downgraded from “hold” to “sell” by TA Research.
On June 20, Gadang’s wholly-owned subsidiary, Gadang Engineering (M) Sdn Bhd, announced a RM92.5mil construction contract from AFA Construction and Engineering Sdn Bhd to expand the Kuala Lumpur-Karak Highway.
The project is scheduled for completion within 18 months, by end-2026.
The contract represented Gadang’s first in FY26, bringing its estimated unbilled order book to RM1bil, equivalent to 3.6 times its FY24 construction revenue.
“With an anticipated project margin of about 0.5%, we forecast a net profit contribution of RM4.6mil over the contract duration,” TA Research said.
According to management’s latest update, the company’s tender book stands at RM3bil, with opportunities in infrastructure, rail-related works, and data centres.
For FY26, Gadang is targeting RM500mil in new job wins as part of its order book replenishment strategy.
