KUALA LUMPUR: Analysts are raising their profit forecasts and target share prices for Gamuda Bhd following the construction group’s announcement of double data centre contract wins worth RM1.74 billion last Friday.
Hong Leong Investment Bank Bhd Research (HLIB Research) said this brings Gamuda’s unbilled order book to RM25.8 billion while also carrying superior margins versus infrastructure projects.
In a note today, the research house lifted its financial years 2025 and 2026 core profit after tax and minority interest forecasts for Gamuda by 10.8% and 6.9%, respectively, while maintaining its “buy” call with a higher target price (TP) of RM6.88.
Meanwhile, Kenanga Investment Bank Bhd said that with job wins of RM15.1 billion-RM16 billion year to date, Gamuda is on track to surpass its job win target of RM25 billion over two years in FY2024-2025.
“We raise our FY2025 net profit forecast by 6%, having lifted our FY2024-FY2025 combined job win assumption to RM27 billion from RM25 billion,” it said in a note, keeping its “outperform” rating with a higher TP of RM6.70 (previously RM6.20).
To recap, Gamuda announced last week that wholly owned unit Gamuda Engineering Sdn Bhd has bagged two contracts – an RM815 million contract to build a hyperscale data centre at Sime Darby Property Bhd’s Elmina Business Park in Selangor as well as a RM928.6 million contract for mechanical, electrical and plumbing fit-out works.
These wins mark Gamuda’s biggest data centre contracts to date, HLIB Research said, adding that data centre jobs comprise 8% of the estimated unbilled construction order book.
“We reckon that data centre projects carry outsized earnings contribution considering shorter execution period and superior margins versus domestic tunnelling.
“We do not discount the possibility of Gamuda winning more works should there be future phases/scopes to be developed,” it said.
The research house said Gamuda’s established regional presence and track record coupled with current growth in data centre investments could translate into regional penetration opportunities going forward.
It noted further opportunities for order book expansion as Gamuda formalises contracts for Penang Light Rail Transit, Upper Padas hydroelectric power plant in Sabah, and Sydney Metro West variation orders, while an award decision is expected for Suburban Rail Loop Package D, among other infrastructure opportunities in Australia undertaken by subsidiary DT Infrastructure Pty Ltd, not to mention data centres and water projects locally. - Bernama
