Great Gamuda boost from big infra projects revival


Gamuda Bhd will be one of the stronger beneficiaries from the impending rollout and revival of big-ticket infra projects such MRT3 and KL-SG HSR, said MIDF Research.

KUALA LUMPUR: Gamuda Bhd will be one of the stronger beneficiaries from the impending rollout and revival of big-ticket infra projects such MRT3 and KL-SG HSR, said MIDF Research.


The firm said the potentially fast-tracked mega public infra projects could drive order book replenishment prospects of Gamuda.


"We believe the approval and impending rollout of mega public infra projects as announced in 2021 Budget to pump prime the economy to benefit the group moving forward.


"Therefore, we are of the view that the group's financial year 2021 (FY21) earnings will be a back-loaded year," it said.


MIDF Research also said major contracts worth over A$10 billion to be potentially secured in Australia by Gamuda in financial years 2021-2022.


The firm gathered that the contract award for "M6 Stage 1 Motorway project" worth about AU$2.6 billion in Sydney involving building a twin 4.0-km tunnels was expected to be announced in the first half of 2021 in which the group was one of three bidders.


"Coupled with its focus for oversea expansion, we remain positive on the group's job replenishment prospects to continue to be driven by its in-roads into Australia's growing construction market," it said.


MIDF Research is revising its FY2021 and FY2022 earnings forecasts on Gamuda to RM603.0 million and RM651.8 million respectively.


This is mainly premised on the potential rollout of KVMRT3 and HSR mega infra projects in late 2021 given that the government aims to pump-prime the economy next year and possibly fast-track the implementation process.


"We continue to expect that the group's revenue and earnings prospects to post a relatively stronger recovery in coming quarters following the prompt resumption of construction and business activities and increased workforce capacity at work sites as seen during the CMCO period.


"On a longer-term horizon, the group's prospect is well-supported by its strong outstanding order book of about RM6.1 billion which will provide earnings visibility over the next three years.


"We maintain 'buy' on Gamuda with a revised target price of RM4.20," it added.

Sumber: New Straits Times

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