PETALING JAYA: Gamuda Bhd
is expected to sustain its strong earnings visibility and contract replenishment momentum into financial year ending July 31, 2027 (FY27), with its latest Taiwan contract win strengthening an already sizeable order book and leaving room for further project awards before year-end.
The engineering and construction group is also on track to meet, and potentially exceed, its order book replenishment targets, supported by infrastructure opportunities in Malaysia, Australia and Taiwan, alongside demand for data centre projects.
TA Research noted the latest award would lift Gamuda’s FY27 year-to-date new job wins to RM15.2bil and its total unbilled construction order book to RM63.9bil.
“This robust order book backlog implies 4.3 times Gamuda’s FY26 construction segment revenue, providing its clear near-term earnings visibility,” it said.
The research house believes Gamuda could raise its end-2026 outstanding order book target to between RM62bil and RM64bil, above its internal RM60bil target, even after accounting for an estimated RM4bil order book burn over the remaining three months of the year.
TA Research maintained its “buy” call on Gamuda with an unchanged target price of RM5.65. The latest development came after Gamuda announced that its joint venture with MiTAC Information Technology had secured a 29.2 billion New Taiwan dollar (RM3.7bil) contract for the Keelung Mass Rapid Transit systems in Taiwan.
Hong Leong Investment Bank Research said Gamuda had already achieved half of its RM30bil FY27 job replenishment assumption in less than three months, suggesting further upside to its forecast.
“We believe there is an upside risk to our RM30bil job win assumption for FY27.”
The research house maintained its “buy” rating and RM5.75 target price, naming Gamuda its top pick in the construction sector.
It expects earnings to accelerate from 2027 as projects progress into more intensive construction phases and higher-margin contributions begin to materialise.
RHB Research also retained its “buy” call at RM6.20, with no changes to its earnings estimates, as the latest award falls within its RM25bil FY27 replenishment target.
It sees further contract opportunities before end-2026, particularly in data centres and Australia’s railway sector, including Queensland’s Direct Sunshine Coast Rail Line.
CGS International Research maintained its “add” call and target price of RM6.40, valuing Gamuda’s construction division at 19 times forecast FY27 earnings.
It noted that 90% of the group’s order book had yet to reach peak progress, with projects only 0% to 25% completed as at Oct 26.
The research house said continued contract flows and improving earnings delivery could support a sustained re-rating of the shares, while earlier-than-expected completion of three projects in New South Wales could provide upside to FY27 earnings.
BIMB Research maintained its “buy” recommendation at RM5.91, keeping its FY27 to FY29 earnings forecasts unchanged.
It said the contract’s cost-plus terms and above-average margin would improve earnings quality, while the remaining Xizhi-Donghu project pipeline would provide further visibility for Taiwan contract replenishment.
Phillip Capital Research also reiterated its “buy” call and RM5.80 target price.
Assuming a monthly revenue burn rate of RM1.5bil, it is estimated Gamuda’s order book would stand at RM59bil by end-2026 even without further awards, leaving only RM1bil in new contracts needed to meet management’s RM60bil guidance.
The research house sees additional upside from potential awards for the Pyrmont station project and ongoing data centre tenders.
Meanwhile, an analyst said Gamuda appears on track to secure more job wins.
“The group’s diversified geographical exposure and healthy project pipeline should continue to support its growth momentum,” he said.
