BIMB Research maintained its “buy” recommendation on Gamuda with an unchanged target price of RM6.73, underpinned by strong order-book visibility.
PETALING JAYA: Gamuda Bhd
’s earnings visibility is expected to strengthen over the medium term as its Australian rail footprint deepens, potentially reinforcing its standing as a preferred contractor for complex metro infrastructure works.
The latest development underscores the group’s strategy of leveraging technical expertise to secure recurring work in developed markets with long-term transport pipelines.
Gamuda recently unveiled that its unit has been shortlisted for the Pyrmont Integrated Station Development under Sydney Metro West through a consortium comprising Gamuda Engineering, Gamuda Australia and Urban Property Group Australasia.
The Pyrmont station forms part of the 24-km Sydney Metro West line connecting Greater Parramatta to the Sydney central business district, with completion targeted by May 2031.
According to BIMB Research, the context of the tender is important, as Sydney Metro West comprises four major packages with a combined programme value of approximately A$11.4bil, all of which have already been awarded.
The linewide package was valued at A$3.2bil, the stations package west at A$2.7bil, the trains, systems, maintenance and operations package at A$3.96bil, and the Hunter Street Station and Precinct Development Partner package at A$1.5bil.
BIMB Research maintained its “buy” recommendation on Gamuda with an unchanged target price of RM6.73, underpinned by strong order-book visibility.
“Valuation wise, the stock trades at a forward price-earnings ratio of 13.6 times, well below its 10-year historical average of around 18 times, which we view as attractive, given the improved earnings visibility,” it added.
“Given that the Pyrmont Station Package carries similar technical and delivery risk characteristics to other Sydney Metro station packages previously secured by Gamuda, we see a high probability of success,” BIMB Research noted.
“We estimate the contract could be worth around A$1.5bil (RM4.1bil), subject to Gamuda’s eventual equity stake,” it added.
If secured, this would provide upside to order-book replenishment and support management’s target to scale the group’s outstanding order book to RM50bil by end-2026, from RM45.9bil at end-2025.
BIMB Research also highlighted that Gamuda’s recent track record in Sydney Metro West supports its optimistic stance.
