PETALING JAYA: GDB Holdings Bhd
continues to strengthen its earnings visibility with its third contract win this year, raising its order book to RM785.7mil, backed by a sizeable tender book of RM3.1bil.
Apex Research, in a note, said the construction services firm’s latest contract worth RM115.5mil accounted for 21% of its job replenishment assumption of RM550mil for the financial year ending Dec 31, 2026 (FY26), and provided a clearer earnings outlook through to FY29.
Through its wholly-owned subsidiary GDB Infra Sdn Bhd, GDB was appointed by Pembinaan JBS Sdn Bhd as a sub-contractor to undertake the construction, supply, delivery, installation, testing and commissioning for a proposed water treatment plant in Song District, Sarawak.
With an expected construction period of 36 months, the project is scheduled to commence in March and targeted for completion by the first quarter of 2029.
Apex Securities estimated that the contract would be able to generate RM5.5mil to RM6.5mil in profit after tax (PAT) over FY26 to FY29, or RM1.4mil to RM1.6mil annually, based on a conservative 5% to 6% PAT margin.
“This represents approximately 2% to 3% of our FY26 group PAT forecast of RM61.9mil, indicating a modest earnings contribution,” it noted.
The research house said it made no changes to its earnings forecasts as the recent job win fell within its internal job replenishment estimates.
Nevertheless, it said it is positive on GDB’s prospects, with three major projects in its order book entering peak revenue recognition phases.
“Looking ahead, we expect a pickup in non-infrastructure project wins as three ongoing projects, namely the Metrohub 4 logistics warehouse in Klang, logistics hub plot B in Shah Alam and the International Tertiary Hospital in Kuala Lumpur, are nearing completion by FY26, which should free up resources for new job intake,” the research house said.
Additionally, the group’s RM3.1bil tender book is estimated to potentially be lifted to RM4bil, as further RM1.3bil worth of bids are being prepared for submission by the second quarter of 2026 across warehouse, residential, commercial and mixed-use segments.
Apex Securities had maintained its “buy” recommendation on the stock with an unchanged target price of 48 sen, based on a multiple of eight times FY26 forecast earnings per share of six sen, backed by a three-star environmental, social and governance rating.
It added that key risks included rising material prices, failure to secure new contracts, and risk of liquidated ascertained damages.
