KUALA LUMPUR: Gamuda Bhd
’s shares ticked up in early trade Friday after the group announced that its wholly-owned unit, Gamuda (Singapore) Pte Ltd, together with joint venture partners Evia MSC Pte Ltd and H108 Pte Ltd, had placed the highest bid for a land parcel in Singapore.
The counter rose six sen or 1.08% to RM5.61 with 1.39 million shares traded at 10.42am. Year-to-date, the stock has gained more than 19%.
The 29,450.3 sq m leasehold land at Chencharu Close attracted a winning bid of S$1.01bil (RM3.33bil), or about S$980 per sq ft per plot ratio. The site is earmarked for mixed commercial and residential development.
The second and third highest bidders came in at S$845.0mil and S$692.4mil, respectively.The Housing and Development Board of Singapore will decide on the award of the tender after evaluating the bids.
MBSB Research expects HDB to award the tender to the Gamuda-led joint venture, given its highest bid, which came in 19.8% above the second-highest offer.
“This will then form part of Gamuda’s quick turnaround project (QTP) portfolio, which could be launched in CY26. This is a rather timely continuation of Gamuda’s presence in the Singapore property scene following the completion of OLA last year,” it said.
In terms of construction, Gamuda’s FY26 new wins are RM2.64bil to date, with an estimated outstanding order book level of RM35.8bil.
“We expect Gamuda to comfortably hit the RM40bil to RM45bil outstanding order book level by the year-end, with RM11bil to RM15bil of new wins, expected to be secured from data centres, additional works for the Xizhi Donghu MRT and potential contract conversion from early contractor involvement (ECI) jobs for renewable energy in Australia,” MBSB said.
It added that there may also be a potential variation order from the Sydney Metro West tunnelling project, which was halted for two months due to its proximity to the foundations of an existing building.
MBSB is maintaining its “buy” recommendation on Gamuda with an unchanged sum-of-the-parts (SOTP) derived target price of RM6.35.
“Gamuda remains our top pick for the construction sector, sitting on an all-time high order book of RM37.2bil and a geographically diversified portfolio for both construction and property.”
Meanwhile, RHB Research said it views the latest land deal as positive for Gamuda, noting that the group’s OLA Residences project in Singapore recorded lumpy earnings in 3QFY24 and now has no remaining gross development value (GDV).
The planned development at Chencharu Close, however, will be a private condominium that allows for progressive billing of buyers, which places less strain on the balance sheet. In contrast, OLA Residences is an executive condominium where buyers make a bullet payment upon delivery.
“We learnt that the planned development at Chencharu Close falls under Gamuda’s portfolio of QTP. As of the end of April, QTPs were estimated to have circa RM11.5bil of remaining GDV (based on effective share) spread across projects in Melbourne, London and Vietnam.
“With the latest Chencharu Close development having an estimated GDV of around RM6bil, or about RM3bil effective share for Gamuda’s 50% stake in the joint venture, Gamuda’s remaining GDV for QTPs may increase by approximately 26% to RM14.5bil,” RHB said.
