PETALING JAYA: Analysts remain positive on Gamuda Bhd
after the group secured a fresh RM1.72bil hyperscale data centre (DC) contract in Port Dickson, as the latest win strengthens visibility over earnings and keeps its ambitious order-book target within reach.
CGS International (CGSI) Research said the contract, awarded by an existing US multinational client, reinforced Gamuda’s growing role in Malaysia’s fast-expanding DC construction segment.
The job covers site infrastructure, core and shell works, as well as mechanical, electrical and plumbing packages for a single-storey hyperscale facility, with completion targeted between the second quarter of 2026 and first quarter of 2028.
The research house reiterated its “add” call with a target price of RM5.78, noting that the latest contract lifted Gamuda’s year-to-date (y-t-d) financial year 2026 (FY26) order wins to RM15bil and expanded its outstanding order book to RM45.5bil.
“This win brings y-t-d FY27/FY26 wins to RM15bil and its order book to RM45.5bil as at April 2026. DCs now account for 10% of this order-book value,” CGSI Research said.
It added that the expected pre-tax margin of 8% was consistent with previous DC contracts, as these jobs are structured on a cost-plus basis, offering earnings visibility despite margin discipline.
CGSI Research believes more contracts could emerge from the same site in Negri Sembilan, where Pearl Computing owns a 389-acre campus with capacity for eight to nine DCs worth an estimated RM16bil to RM18bil in total.
Gamuda is seen as a frontrunner for at least one further award there this year.
Hong Leong Investment Bank (HLIB) Research also maintained its “buy” recommendation, although it lowered its target price to RM5.31 from RM5.60 after revising margin assumptions in both its construction and property divisions.
The brokerage said Gamuda’s latest letter of award was “long-anticipated” and likely linked to the Springhill site in Port Dickson, where the group is already undertaking water infrastructure works.
“Although Gamuda had a slow start in stacking up wins so far in calendar year 2026 (CY26), we believe the group is still on track to achieve its target RM50bil order book by end-CY26,” HLIB Research said.
Assuming a burn rate of RM1.2bil a month, HLIB Research estimates Gamuda still needs another RM17bil in contract replenishment this year, which could come from Sabah and Perak water projects, renewable energy jobs in Australia and Malaysia, rail systems contracts, and additional DC tenders.
On earnings, CGSI Research projects net profit to rise from RM1.08bil in FY26 to RM1.67bil by FY28, while HLIB Research forecasts core profit after tax and minority interests to reach RM1.68bil in FY28.
Both research houses said Gamuda’s diversified exposure across construction, property and overseas infrastructure remained a key strength, with Australia’s renewable energy pipeline and Taiwan rail jobs adding further upside.
Meanwhile, an analyst told StarBiz that the impact of rising building material costs remains manageable.
This is as Gamuda’s order book is supported by a relatively defensive project mix, with about 60% coming from overseas jobs, most of which are structured under cost-plus arrangements.
For local government contracts, project budgets usually include built-in cost buffers to absorb fluctuations.
However, the main risks now lie in possible back-end loading of earnings recognition and slower implementation of major infrastructure projects.
