PETALING JAYA: Gamuda Bhd
’s growth runway remains firmly intact, underpinned by a sizeable domestic and overseas project pipeline that could lift its order book to RM50bil by end-2026.
The group’s near-term earnings uplift is likely to be more muted as high-margin jobs progress slower than initially expected.
Affin Hwang Investment Bank Research said management remains confident of meeting its RM50bil order book target, implying new contract wins of about RM20bil this year, assuming progress billings of RM15bil.
“With a record RM45.9bil order book secured, we view the revision as a timing variance in recognition rather than execution deterioration; earnings momentum is expected to recover as billings eventually ramp up,” it added.
The group bagged a string of Australian infrastructure wins in December 2025 worth RM9.5bil, spanning water pipelines, renewable energy and rail projects.
Looking ahead, Gamuda is bidding for projects with an estimated contract value of RM17bil to RM22bil, including Malaysian water and light rail transit (LRT) packages, data centre jobs, Taiwan’s Xizhi–Donghu MRT provisional works and renewable projects in Australia and New Zealand.
The research house noted that upside could be skewed towards Oceania, where Gamuda Engineering Australia and DT Infrastructure together still have more than A$6bil worth of active tenders.
Another potential catalyst is the revival of the Klang Valley MRT3. Gamuda-MMC joint venture had previously submitted the lowest bid of RM13.3bil for the underground package.
If the project is re-tendered and awarded in 2027, core earnings could rise by about 3% to 5% from current forecasts.
However, the broker cautioned that earnings growth over financial year 2026 (FY26) to FY27 is likely to lag earlier expectations due mainly to timing issues.
High-margin domestic infrastructure projects, including the RM6.4bil Penang LRT Mutiara Line and the Upper Padas water scheme, are still at early stages of their construction S-curve following delays in approvals and notices to proceed.
As a result, meaningful margin contribution is now expected to be back-loaded beyond FY26. Also, much of its recent order replenishment came from Australia and will initially be in mobilisation phases, limiting short-term profit impact.
Property earnings may also face headwinds, with Gamuda Land’s RM5.5bil sales target for FY26 at risk due to regulatory delays for its Hai Phong project and soft demand in the domestic premium segment.
Meanwhile, the research house expected the proposed Sunway Bhd-IJM Corp Bhd merger as a manageable risk to Gamuda.
“We do not foresee the potential enlarged Sunway-IJM group to erode Gamuda’s competitive edge in the near term.
“In fact, the transaction could act as a temporary distraction for management and tender focus until integration is completed.
“The more plausible competitive pressure, in our view, is on the property side, where a combined platform anchored by Sunway’s brand and complemented by a larger land bank could intensify competition for Gamuda Land in select segments.”
Affin Hwang Research cut its FY26 to FY28 core earnings forecasts by 2% to 19% and lowered its target price to RM5.70, though it maintained a “buy” call, citing the strength of Gamuda’s order book, technical leadership in complex infrastructure works and expanding regional footprint.
