Gamuda Berhad expanded its project portfolio with a new rail signalling project in Perth, with all stock brokers namely RHB Investment Bank (RHB), MIDF Amanah Investment Bank (MIDF), and CGS International Stock Broking House (CGS). giving positive views on the latest project signing.
RHB maintained its BUY rating with a target price of RM9.68, emphasising Gamuda's strategic alliance with ALSTOM Transport Australia, which secured the METRONET High-Capacity Signalling project valued at AUD1.6bn (MYR5bn). This achievement supports RHB's confidence in Gamuda's growth trajectory, highlighting the company's robust outstanding order book of MYR25bn.
MIDF also retained a BUY recommendation with a target price of RM7.50, noting that Gamuda's share in the AUD1.6bn contract amounts to AUD737m (RM2.3bn). The project involves the design, supply, testing, and maintenance of Urbalis Communications-based Train Control systems on Perth's suburban rail networks. MIDF highlighted Gamuda's consistent performance in securing significant contracts, reinforcing its position in the construction sector.
CGS reiterated its ADD rating with a target price of RM9.50, appreciating the formalisation of the RM2.3bn project in Western Australia. CGS recognised the diversification and geographical expansion of Gamuda's operations, noting the company's strategic focus on rail, road, bridges, defence, energy, and marine infrastructure. The completion of this project would significantly contribute to Gamuda's order book target of RM25bn by the end of CY24.
The analysts acknowledged Gamuda's strategic planning and operational efficiency in securing and executing large-scale projects. They projected that Gamuda would continue to achieve substantial new contract wins, such as the Penang Light Rail Transit Segment 1 and the Upper Padas Hydroelectric Dam project, which could further boost its order book. Additionally, Gamuda's integration of DT Infrastructure has been noted as a positive development, enhancing its capability in the Australian market.
RHB, MIDF, and CGS pointed out Gamuda's solid financial performance, with expectations of continued earnings growth. RHB's analysis indicated a potential job win worth MYR2-3bn from the Upper Padas Hydroelectric Dam, while MIDF mentioned that the management expects a pretax margin of 5%, translating to RM115m over the project duration. CGS noted the acquisition's synergy benefits, with engineers from DT Infrastructure contributing to Gamuda's projects in Australia.
With its diversified order book and strategic international expansion, Gamuda is well-positioned for sustained growth. Analysts remain optimistic about Gamuda's future prospects.