12-06-2025
Gamuda on track to achieve order book aim
Gamuda's current order book is estimated at RM37bil.
PETALING JAYA: Gamuda Bhd 's failure to land the Suburban Rail Loop (SRL) project in Australia will not diminish its plan to have an order book of RM40bil to RM45bil by the end of its financial year ending July 31, 2025 (FY25), says CGS International (CGSI) Research.
The construction and engineering giant has a tender book of RM24bil, including bids for five data centre buildings contracts, according to the research house.
Gamuda's current order book is estimated at RM37bil.
'While it did not win the SRL Linewide project, of Gamuda's portion is estimated at RM10bil, we believe the company could win other projects that could replace it.
'At its March analyst briefing, Gamuda highlighted a pipeline of RM35bil jobs where SRL was one of them.
'So far it has won one project from this list, the RM1bil data centre enabling works for Pearl Computing,' the research house stated in a report following a meeting with its management.
Some of the projects on bid is the Sabah water treatment plant (RM4bil worth of works), additional works for the Penang light rail transit or LRT project estmated at RM3bil, mass rail transit job in Taiwan (RM3bil), station works in Sydney/Melbourne (RM6bil) and early contractor involvement for renewable energy in Australia worth some RM2bil.
Gamuda is due to file its third quarter (3Q25) results on June 26, and CGSI Research expects an improvement in net profit year-on-year (y-o-y) and sequentially, with a meaningful pick-up to come in FY26 when its local construction projects and Vietnam property project gradually move away from the shallow part of the S-curve recognition.
CGSI Research said Gamuda is, however, unlikely to meet its RM6bil property pre-sales target for FY25 as approvals for its Hanoi project (Gamuda City) have been slow.
'As Gamuda has pencilled in RM840mil pre-sales for this project for FY25, we believe FY25 group pre-sales will likely come in flat year-on-year (y-o-y) at RM5bil.
'Another concern for investors regarding its exposure to the Vietnam property market, where it has eight projects with a gross development value (GDV) of RM18bil (29% of total GDV as of Jan 25), is US import tariffs, which could disrupt foreign investment and sentiment,' CGSI Research added.
The research house viewed Gamuda's exposure to Vietnam as heavy on its residential quick turnaround projects located in prime locations.
'The litmus test is the launch of the third phase of Eaton Park, which we expect to take place in June.
'The maiden launch in May 2024 was fully sold in two hours, leading to a second launch in December 2024, which had since been fully sold as well,' CGSI Research noted.
It has retained its 'add' call on Gamuda with a target price of RM6 a share despite trimming its earnings projections on the company.
CGSI Research cut its FY25 to FY27 earnings per share forecast for Gamuda by 11%, 7% and 2% for FY25, FY26 and FY27 respectively, driven by expectations of slower progress for some construction projects, such as Silicon Island reclamation works (six months behind schedule) and the Penang LRT.
There was also a delay in contract awards of projects including the Sabah Water Treatment plant as well as data centre projects.
'Nevertheless, we think FY27 earnings should still double from FY24, implying three-year compounded annual growth rate of 24%,' it said.
