Gamuda's outlook positive on strong project pipeline: analysts
KUALA LUMPUR: Gamuda Bhd's outlook remains upbeat, supported by a robust project pipeline, according to analysts.
Hong Leong Investment Bank Bhd (HLIB) said that despite some delays in converting contracts and minor challenges in its bid for the Suburban Rail Loop (SRL) systems package, Gamuda's order book is still expected to grow to between RM40 billion and RM45 billion by the end of the year.
HLIB also highlighted that the company has recently been shortlisted for more projects, including New Zealand's Northland Corridor highway.
"Gamuda is optimistic of prospects in Taiwan as the award timing of the RM11 billion rail extension could come earlier than expected.
"Accounting for the SRL systems setback, Gamuda's high certainty pipeline remains massive at more than RM25 billion.
"Further to this, we view the recent conclusion of Australian GE as reinforcing renewables' growth trajectory which bodes well for its existing pumped hydro ECIs (worth RM5 billion each)," it said.
Meanwhile, Public Investment Bank Bhd (PublicInvest) noted that Gamuda's year to date project wins have reached RM15.8 billion, with its current outstanding construction orderbook estimated at RM34.6 billion.
It said the jobs pipeline remains encouraging, with an additional RM15-20 billion new wins expected by end of calendar year 2025 (CY25), spanning water infrastructure, data centers (DC), renewables, and other key projects across Malaysia, Australia, and Taiwan.
"On the property front, unbilled sales are now estimated at RM7.7 billion, with a RM5 billion sales target for FY25.
"Regarding the data centre (DC) pipeline, Gamuda's DC partners indicated no plans to slow down or delay rollouts, and negotiations for additional DC projects are progressing well," it said.
Gamuda reported a stronger quarter in the third quarter (Q3) financial year 2025 (FY25), with core net profit reaching RM246.8 million, mainly driven by improved performance in its domestic engineering & construction (E&C) division.
However, PublicInvest said the cumulative nine month FY25 core net profit of RM664.5 million came in below both the firm's and consensus expectations, accounting for only 66.2 per cent and 63.8 per cent of respective full year estimates.
It said the shortfall was primarily due to slower than expected earnings recognition from its overseas construction and property projects.
"That said, we keep our earnings forecasts unchanged, as we expect Gamuda's performance to catch up in the final quarter, which has historically been its strongest.
"We remain optimistic about its prospect, supported by encouraging project pipeline, and maintain our Outperform call on Gamuda with unchanged target price of RM5.30," it added.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
7 hours ago
- The Star
Gamuda on track to hit 2025 orderbook target, driven by wins including data centre tenders
KUALA LUMPUR: Gamuda Bhd is on track to hit its orderbook target of RM40 billion to RM45 billion by end-2025. The expectation is premised on high potential wins in the coming months, namely the Sabah water supply scheme, five data centre (DC) tenders, and early contractor involvement works from renewable energy-related projects in Australia, said RHB Investment Bank Bhd. In a research note today, RHB Investment Bank said the Sabah water supply scheme is estimated to be between RM3 billion and RM4 billion. The five DC tenders are likely to be in Elmina Business Park and an industrial park in Puncak Alam. The outcomes are expected between July and August. "Further upside may come if the DC awards related to the 389-acre land in Negeri Sembilan were to take place in 2025. "With an unbilled orderbook of RM34.6 billion as of end-April 2025 and an assumed burn rate of RM1 billion per month, Gamuda needs RM13 billion to 18 billion worth of new wins between now and December 2025 to hit its 2025 outstanding orderbook target,' it said. RHB Investment Bank made no changes to its earnings estimates while maintaining a "Buy' call with a target price (TP) of RM5.64 per share. Meanwhile, Public Investment Bank Bhd said Gamuda's jobs pipeline remains encouraging with its year-to-date project wins reaching RM15.8 billion. "Gamuda's DC partners indicated no plans to slow down or delay rollouts, and negotiations for additional DC projects are progressing well,' it added. On the property front, Public Investment Bank said its unbilled sales are now estimated at RM7.7 billion, with a RM5 billion sales target for the 2025 financial year. It maintains an "Outperform' with unchanged TP of RM5.30 per share. Meanwhile, CIMB Securities Sdn Bhd expects Gamuda to crystallise at least RM7 billion worth of orders from six to seven DC-related bids within the next four months, excluding the proposed Springhill DC hub in Port Dickson. It concurs with RHB Investment Bank that Gamuda's order book target of RM40 billion to RM45 billion remains intact, supported by DCs and a potential expansion into the New Zealand construction space. it also said Gamuda has been shortlisted for Australia's Sunshine Coast Railway in Brisbane and the Northland Corridor Highway in New Zealand. It has a "Buy' call with a TP of RM5.50 per share. Hong Leong Investment Bank Bhd said award decisions for six to seven DC tenders, placed in the first half of 2025, are expected in the coming two to four months. This includes five multi-billion ringgit tenders for one of Gamuda's existing clients. It is further expecting the Springhill, Negeri Sembilan DC campus to gain traction in 2026 after the impending award cycle, it said. Gamuda was recently awarded a RM1 billion enabling works contract, it said. "We maintained a 'Buy' rating with a higher TP of RM5.50 per share,' it added. Gamuda recorded a higher net profit of RM671.08 million with revenue rising to RM11.13 billion in the third quarter ended April 30, 2025. At 11 am, Gamuda rose five sen to RM4.70 with 6.07 million shares traded. - Bernama
Focus Malaysia
8 hours ago
- Focus Malaysia
Top Glove optimistic despite tariff concerns, sees orders picking up
TOPGLOVE registered a nine months financial year 2025 (9MFY25) reported net profit of RM71 mil versus a loss in 9MFY24. Its 9MFY25 core profit after tax and minority interest (PATAMI) of RM37 mil missed expectations. It registered a core net profit of RM37 mil or 37% and 45% of our and consensus full-year net profit forecasts, respectively. 'We highlight that quarter-on-quarter (QoQ), quarter three financial year 2025 (3QFY25) registered a volume sales increase of 4% against market expectation of a lower sales volume despite the challenging operating environment,' said Kenanga. The negative variance from their forecast was due to lower-than-expected margins. QoQ, 3QFY25 revenue fell 6% due to a lower average selling price (ASP) (-5%) but this was negated by a higher sales volume (+4%). Correspondingly, earnings before interest, tax, depreciation and amortisation (EBITDA) fell 30%, due to lower revenue leading to lower-than-expected economies of scale. The lower ASP was due to heightened competitive pressure in the European markets while customers in the US paused at the sidelines pending clarity from tariffs uncertainties and a lower input raw material latex (-9%) and nitrile (-4%) leading to cost savings pass through to customers. As a result, core profit fell to RM5 mil in 2QFY25 compared to RM27 mil. Year-on-year (YoY), 9MFY25 revenue rose 55% largely due to a higher sales volume (+60%) and ASP (+1%). At the net level, it returned to the black in 9MFY25 with a core net profit of RM37 mil compared to a loss of RM58 mil in 9MFY24 due to the absence of high-cost inventory. No dividend was declared this quarter as expected. The key takeaways from the analysts briefing are as follows: It guided utilisation to be higher in 4QFY25. In fact, June CY25 utilisation rate is presently 65% compared to 61% in 3QFY25. The group is optimistic on demand trends, downplaying the impact of recent tariff-related disruptions, as there is only so long customers can hold off buying. In fact the group has started seeing orders flowing back in May and June and expect momentum to continue in July. It expects 4QFY25 volume sales to grow at 15-20% QoQ on the back of order replenishment and US orders picking up following the frontloading effects of US customers purchasing from Chinese glove makers in 4QCY24. The group highlighted that its exports to the US continued to show improvement which rose 24% QoQ in 3QFY25. U.S. sales accounted for 26% of total group volume sales above the 15% mix for FY24, and heading towards the pre-pandemic average of 20%−30%. In order to mitigate competitive pressure in non-U.S. markets such as Europe, where China manufacturers' aggressive nitrile glove pricing strategies may pose challenges, it can switch between natural rubber and nitrile glove production lines. —June 30, 2025 Main image: The Sun
New Straits Times
8 hours ago
- New Straits Times
Gamuda's outlook positive on strong project pipeline: analysts
KUALA LUMPUR: Gamuda Bhd's outlook remains upbeat, supported by a robust project pipeline, according to analysts. Hong Leong Investment Bank Bhd (HLIB) said that despite some delays in converting contracts and minor challenges in its bid for the Suburban Rail Loop (SRL) systems package, Gamuda's order book is still expected to grow to between RM40 billion and RM45 billion by the end of the year. HLIB also highlighted that the company has recently been shortlisted for more projects, including New Zealand's Northland Corridor highway. "Gamuda is optimistic of prospects in Taiwan as the award timing of the RM11 billion rail extension could come earlier than expected. "Accounting for the SRL systems setback, Gamuda's high certainty pipeline remains massive at more than RM25 billion. "Further to this, we view the recent conclusion of Australian GE as reinforcing renewables' growth trajectory which bodes well for its existing pumped hydro ECIs (worth RM5 billion each)," it said. Meanwhile, Public Investment Bank Bhd (PublicInvest) noted that Gamuda's year to date project wins have reached RM15.8 billion, with its current outstanding construction orderbook estimated at RM34.6 billion. It said the jobs pipeline remains encouraging, with an additional RM15-20 billion new wins expected by end of calendar year 2025 (CY25), spanning water infrastructure, data centers (DC), renewables, and other key projects across Malaysia, Australia, and Taiwan. "On the property front, unbilled sales are now estimated at RM7.7 billion, with a RM5 billion sales target for FY25. "Regarding the data centre (DC) pipeline, Gamuda's DC partners indicated no plans to slow down or delay rollouts, and negotiations for additional DC projects are progressing well," it said. Gamuda reported a stronger quarter in the third quarter (Q3) financial year 2025 (FY25), with core net profit reaching RM246.8 million, mainly driven by improved performance in its domestic engineering & construction (E&C) division. However, PublicInvest said the cumulative nine month FY25 core net profit of RM664.5 million came in below both the firm's and consensus expectations, accounting for only 66.2 per cent and 63.8 per cent of respective full year estimates. It said the shortfall was primarily due to slower than expected earnings recognition from its overseas construction and property projects. "That said, we keep our earnings forecasts unchanged, as we expect Gamuda's performance to catch up in the final quarter, which has historically been its strongest. "We remain optimistic about its prospect, supported by encouraging project pipeline, and maintain our Outperform call on Gamuda with unchanged target price of RM5.30," it added.
