Latest news with #RM40bil
The Star
5 days ago
- Business
- The Star
Gamuda's latest job win to exceed order-book target
CIMB Research said the NPWSS project provides Gamuda with the base to rebuild its water-related recurring earnings streams. PETALING JAYA: Gamuda Bhd 's latest contract win offers recurring income and a turnkey contract role and helps its total order book exceed its target for 2025. CGS International (CGSI) Research estimates the engineering and construction group's order book for the year could stand at about RM47bil, above its in-house target of RM40bil to RM45bil, after it secured a potential RM5bil worth of water treatment and distribution infrastructure jobs in Kerian, Northern Perak, in a joint venture with Perbadanan Kemajuan Negeri Perak (PKNPk). The project is part of the broader Northern Perak Water Supply Scheme (NPWSS), which aims to transfer 1.5 million litres per day (mld) of raw water from Sungai Perak to the Bukit Merah Dam. Meanwhile, 500 mld of the supply will be allocated to address the immediate irrigation needs of Northern Perak, with the balance to be made available to meet the domestic and industrial demands of Perak. Excess treated water will be sold to Penang. Analysts think the contract win offers Gamuda not just engineering opportunities as the turnkey contractor but also recurring income over some four decades as the developer of NPWSS. CGSI Research noted a PKNPk-Gamuda JV (50:50) will undertake this project on a privatisation basis with a minimum 40-year operation period and take its year-to-date job wins to RM23.4bil. 'Gamuda estimates the pre-tax margin for the project to be around 10% to 12%, within the range of its Malaysian infrastructure projects. 'This will be positive for improvement in its construction margin trajectory, where we expect a more meaningful recovery in financial year 2026 (FY26). 'This is when its local projects (39% of order book as of June 2025) move away from the shallow part of the S-curve recognition,' the research house stated in a report on the company. It added the award could be seen as a signal that the government may look to expedite project flows. Furthermore, CGSI Research maintained its 'add' call on the stock with a sum-of-parts (SOP) derived target price (TP) of RM6 a share. RHB Research, however, believes any formal awards pertaining to the NPWSS project will likely take place next year. Hence, it has made no changes to its earnings estimates for Gamuda, as there were no changes in its order book while awaiting further details such as tariffs, project tenure and approval from the relevant authorities related to the NPWSS project. It made no changes to its 'buy' call on Gamuda nor to its SOP-derived TP of RM5.86 a share. CIMB Research said the NPWSS project provides Gamuda with the base to rebuild its water-related recurring earnings streams following the disposal of its 40% stake in Syarikat Pengeluar Air Selangor Sdn Bhd several years ago. It kept its 'buy' recommendation on Gamuda with an unchanged TP of RM5.50 a share.
The Star
07-07-2025
- Business
- The Star
Gamuda on track to exceed project wins this year
PETALING JAYA: Gamuda Bhd , the country's largest construction player, is 'highly likely' to exceed its order-book target of RM40bil to RM45bil for 2025, according to analysts. CGS International Research (CGSI Research) said Gamuda, whose single-largest shareholder is the Employees Provident Fund, had already achieved an order book of RM37.2bil as of end-June, following its latest contract win worth RM3.72bil in Taiwan announced recently. The contract to build a wharf and connecting bridges for the Kaohsiung Port Intercontinental LNG Terminal Construction Project was secured by its joint-venture company. Given its 70% majority stake in the company, the revenue attributable to Gamuda from the five-year contract is estimated at RM2.6bil. 'We expect one more Taiwan contract win by the end of this year worth about RM3bil, which is part of the additional provisional amount for its RM3.1bil Xizhi Donghu Mass Rapid Transit turnkey construction project in Taiwan that it won last October. 'This project came with already determined additional work of eight billion New Taiwan dollars or about RM10.8bil. Gamuda's 75% share is worth RM8.1bil. 'Including the latest Taiwan order and assuming it wins the local projects it is targeting, we estimate Gamuda will end this year with an order book of RM42.2bil, factoring a burn rate of RM1bil per month. 'This does not include other potential awards in Taiwan, Australia the Penang light rail transit project and the Perak to Penang water transfer project,' the research house said. Meanwhile, MIDF Research expects about RM11bil to RM15bil of new wins for Gamuda. Of the high percentage of wins that the management guided for in a previous analyst briefing in March, about RM24bil worth of contracts remain, MIDF Research said. 'We expect the new wins to come from seven tenders submitted for data centres, a Sabah water project worth RM4bil, additional work on the Xizhi Donghu transit project, and potential contract conversion from early contractor involvement jobs for renewable energy in Australia. 'We believe there may also be a potential variation order from the Sydney Metro West tunnelling project that was halted for two months due to proximity to the foundations of an existing building.' The research house also noted that Gamuda's project pipeline for next year looks healthy, with the construction giant being shortlisted for several projects in Australia and New Zealand, such as the Parramatta Integrated Station Development, Sunshine Coast Railway in Brisbane and the 26-km Warkworth to Te Hana section of the Northland Expressway in New Zealand. With the latest contract win, the share of Taiwanese projects on Gamuda's order book jumped to RM9.9bil, or 27% of its total work, slightly behind Australia at 28%. Nevertheless, CIMB Research said Malaysia continues to be Gamuda's largest construction market, accounting for 39% of its order book. 'We make no changes to our earnings forecast, as the latest win already forms part of our new contract assumptions for this year. 'There is upside to our earnings projections if Gamuda maintains its robust contract delivery and exceeds our win assumptions of RM20bil annually for both this year and next year,' it said. Of the three research firms, CGSI Research had the highest target price of RM6 per share.
The Star
12-06-2025
- Business
- The Star
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.
The Star
06-05-2025
- Business
- The Star
Gamuda strengthens position in DC landscape
Kenanga Research saw potential for Gamuda to secure significant DC projects. PETALING JAYA: Gamuda Bhd is well poised to strengthen its position as a one-stop data centre (DC) infrastructure provider in Malaysia, say analysts. The group has announced the disposal of a 389.7-acre freehold land in Negri Sembilan to Pearl Computing Sdn Bhd (PCSB) for RM455.2mil in cash. Simultaneously, its subsidiary, Gamuda DC Infrastructure Sdn Bhd, has secured a external infrastructure contract worth RM1bil from PCSB. TA Research has viewed the latest developments as exemplifying Gamuda's strength in offering end-to-end 'land+utility+water' packages for DC-related projects. 'With the disposal expected to conclude by end-2025, we estimate a modest gain of RM30.8mil, before accounting for holding and ancillary costs. 'The RM1bil enabling works contract could also boost Gamuda's year to date job wins to RM26.2bil since financial year 2024 (FY24), raising its total outstanding order book to about RM37bil – equivalent to 3.5 times FY24 construction revenue,' said the research house. Based on Gamuda's management guided pre-tax profit margin of around 8%, TA Research noted the contract is anticipated to contribute RM60.8mil in net profit over the construction period. It remained upbeat on Gamuda's DC job prospects given its management which expressed high confidence in securing at least three new projects from two local developers by year-end. Including other imminent contract win namely the Australian Suburban Rail Loop, Sabah Upper Padas water treatment plant, and additional Taiwan Xizhi Donghu MRT packages totalling RM17bil, TA Research believed the management's internal goal of achieving an unbilled order book of RM40bil to RM45bil is within reach. It has maintained a 'buy' call on the stock with a target price (TP) of RM5.88 per share. Kenanga Research, in a note to clients, also saw potential for Gamuda to secure significant DC projects. It noted the 389-acre land has the capacity to support DC developments of 800MW to 1,000MW. With estimated construction costs of RM18mil to RM20mil per MW, the total potential contract value for this development could be RM14bil to RM20bil, said Kenanga Research. Assuming Gamuda secured half of the contracts over a two-year period, the annual data centre job wins could be RM3.5bil to RM5bil. 'This will surpass our current annual assumption of RM3bil. For every additional RM1bil in DC contracts secured beyond our RM3bil assumption, we estimate a 2.2% increase in FY26 earnings forecast and a seven sen rise in the TP from RM4.90,' added the research house. CGS International Research (CGSI Research) highlighted Gamuda's targeted order book of RM40bil to RM45bil by end of 2025. 'If all of the projects come to fruition and assuming a burn rate of RM1bil per month, Gamuda may end up with an order book of RM59bil by end-2025. Our FY25 and FY26 new order win assumptions are more conservative at RM8bil and RM20bil respectively,' it added. CGSI Research, which liked Gamuda for its diversified order book and growing property business, had reiterated an 'add' call on stock with a TP of RM6. MIDF Research described Gamuda's freehold land sale and the award of a RM1bil enabling works contract as a positive development, which is in line with the group's latest strategy of a differentiated DC delivery. 'Gamuda remains our favourite in the construction sector, backed by its successful overseas expansion plan, consistency in clinching sizeable jobs and being a front runner for most mega projects in Malaysia,' it added, reiterating a 'buy' call on Gamuda with a TP of RM5.42. The counter closed three sen down to RM4.35 yesterday.
The Star
01-05-2025
- Business
- The Star
Azam: Deferred prosecution will be used in high-profile cases
MACC chief commissioner Tan Sri Azam Baki speaking to the media during the MACC's Executive Talk session in Putrajaya yesterday. PUTRAJAYA: Graft busters are pushing for the Deferred Prosecution Agreement (DPA) to be introduced as soon as possible to boost the fight against corruption and recovery of assets in high-profile cases. Malaysian Anti-Corruption Commission (MACC) chief commissioner Tan Sri Azam Baki (pic)said the Special Cabinet Committee on National Governance, chaired by Prime Minister Datuk Seri Anwar Ibrahim, is expected to meet in June to discuss the matter. 'We hope it will be introduced as the focus of the DPA is on the recovery of assets. 'The DPA has been used in countries such as the United States and the United Kingdom,' he said during the MACC's Executive Talk with the media. Azam said the DPA will be used in cases involving grand corruption and corporate liabilities involving large amounts of funds. 'We will use it for high profile cases involving large amounts. 'For example, an accused in a grand corruption case involving RM177mil in funds. The DPA will be used to seize the funds so that it goes back to the government's coffers,' he added. The MACC has proposed that cases where DPA will be used must have justification to do so. 'We also proposed that when the DPA is to be used in certain cases, it must have the consensus of the deputy public prosecutor, who will review the justification for DPA to be used. 'We will definitely not use it for small-scale cases,' he said. Azam said he expects the proposed amendment to the MACC Act 2009, which will include the DPA mechanism, to be introduced in Parliament by the second quarter of next year. 'We hope it will be eventually passed and enforced,' he added. Azam has been proposing the DPA for some time, arguing that it will allow prosecutors to achieve outcomes more efficiently without lengthy and costly trials, and that it will help fight economic and financial crimes. It will also ensure faster recovery of assets and funds and better compliance by persons or entities to prevent future violations. On another matter, Azam said it is getting harder for authorities to detect transactions of illicit funds, as criminal entities are resorting to e-wallet platforms and cryptocurrencies. 'If they (criminal entities) use the usual bank transactions, we will be able to track them eventually. 'However, they are using these new transaction mechanisms. Some are also using money changers to transfer ill-gotten funds as well,' he added. Azam believes illicit funds from overseas that have flowed through Malaysia total about RM40bil. 'These illicit funds are derived from various criminal activities, including drug trafficking, smuggling and fraud. 'If we can recover at least RM10bil, it will benefit the country, but it requires efforts between law enforcement agencies and other government bodies,' he added. One of the best examples of repatriation of overseas assets and funds is the 1Malaysia Development Bhd case. 'We had good and lengthy discussions with international authorities that enabled us to repatriate funds and assets belonging to the country.'
