PETALING JAYA: Gamuda Bhd
is expected to sustain its growth momentum on the back of a record order book, robust contract replenishment prospects and emerging opportunities in the data centre (DC) segment, according to Phillip Capital Research.
The research house said the construction and property group’s outstanding order book had reached an all-time high of RM55.4bil, providing strong earnings visibility over the longer term.
Gamuda’s solid order book visibility is underpinned by a strong pipeline, it added.
“Replenishment prospects remain strong, supported by a healthy pipeline of domestic infrastructure projects.
“These include the Northern Coastal Highway Sarawak, Penang light rail transit system packages and Sungai Rasau water supply scheme,” Phillip Capital Research said.
“Internationally, Gamuda’s established track record in delivering large-scale, technically complex infrastructure projects positions the group well to secure additional transport and renewable energy contracts across Australia and New Zealand,” it added.
The research house also highlighted the group’s potential to unlock value from the fast-growing DC sector through its strategic land transaction.
“Its strategic 389-acre DC land transaction could provide an additional earnings leg, potentially capturing a share of RM15bil to RM20bil worth of opportunities,” it added.
Phillip Capital Research said Gamuda’s RM25bil contract wins secured year-to-date had exceeded expectations and reinforced confidence in its ability to replenish its order book.
The replenishment momentum has also surpassed the brokerage’s previous replenishment assumption of RM20bil for financial year 2026 (FY26).
In response, the research house raised its replenishment assumptions for FY26 and FY27 to RM27bil and RM25bil, respectively from RM20bil and RM24bil previously, while maintaining its RM28bil assumption for FY28.
Despite the stronger contract outlook, Phillip Capital Research lowered its earnings forecasts for FY26 to FY28 by between 12% and 20%.
The revision reflects slower recognition of newly secured projects as many remain in the early stages of execution, alongside delays in the rollout of major infrastructure developments.
The research house noted that the bulk of recently awarded contracts remain at the nascent stage of the S-curve, limiting near-term earnings contribution despite their sizeable value.
Nevertheless, Phillip Capital Research maintained its “buy” recommendation on the stock, while reducing its sum-of-parts-derived target price to RM5.36 from RM6.64.
