Malaysia’s infrastructure powerhouse, Gamuda Bhd, has captured the attention of analysts, with MIDF Research expressing confidence in its promising earning outlook. This optimism stems from Gamuda’s impressive order book and its expanding global footprint, with nearly half of the company’s bottom line now attributed to international ventures.
According to a note released by MIDF Research, Gamuda’s core net profit for the third quarter of FY2023 increased by 12.1% YoY to RM223.3 million, buoyed by growing contributions from overseas projects. For the nine-month period ending April 2023, the group’s core net profit soared by 24.9% YoY to RM607.7 million, aligning with the research house’s projections. It also highlighted that around 44% of Gamuda’s core earnings originate from its international operations.
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A testament to Gamuda’s growing international presence is its recent acquisition of Downer Transport Projects (DTP), an Australian entity specializing in rail, strengthening its foothold in Australia. MIDF also lauds Gamuda’s leading position in the Mass Rapid Transit line 3 (MRT3) largest underground package and its ambition to further bid for the systems package.
The potential delay in the MRT3 rollout, MIDF believes, will have a marginal effect on Gamuda due to its extensive job portfolio and its ability to secure more projects.
Reflecting this optimism, MIDF maintains its ‘buy’ call on Gamuda with an unaltered target price of RM5.04 per share. Similarly, Hong Leong Investment Bank Bhd (HLIB) held onto its ‘buy’ rating for Gamuda, slightly increasing the target price from RM4.88 to RM4.92 as the company surpassed its expectations.
HLIB anticipates Gamuda to close FY2023 with an impressive performance, driven by an accelerated construction phase, consolidation of its wholly-owned Australian sub-subsidiary DT Infrastructure Pty Ltd (DTI), and unbilled sales amounting to RM5.7 billion. Additionally, the group’s unbilled order book stands at RM21.5 billion.
On a parallel note, Kenanga Research upheld its ‘outperform’ call on Gamuda with a target price of RM5.15 per share. They commend Gamuda’s competitiveness in the international market, evident from its project wins in Australia and Singapore, a robust balance sheet, and a robust outstanding order book of RM21.5 billion. The company’s efforts to foster growth in renewable energy in alignment with global sustainability goals have also been highlighted. As the market responded to this positive outlook, Bumi Armada’s shares rose to RM4.38 per unit with 4.95 million shares traded.
This news is based on a report from Malay Mail.
