KUALA LUMPUR, Analysts are maintaining an outperform rating on Gamuda Bhd, raising the target price following the company’s recent contract win, which bolsters earnings visibility.
The latest contract, valued at RM3.05 billion, involves building the Ulu Padas Hydroelectric (UPH) Power Plant in Sabah.
According to Public Investment Bank (IB) Bhd, the project is anticipated to contribute approximately 1.7 per cent to Gamuda’s net profit annually.
The bank has reiterated its outperform rating and set a sum-of-the-parts (SOP)-based target price of RM9.20 on the stock.
‘Based on Gamuda’s stake in the joint venture, the contract value attributable to Gamuda is RM2.3 billion, lifting the group’s outstanding order book to an estimated RM31 billion,’ said Public IB in a research report.
At 10.15 am, Gamuda’s share price remained flat at RM8.50, with 1.4 million shares traded.
In partnership with Conlay Construction Sdn Bhd, Gamuda has taken on the role of total development contractor for the 187.5 megawatt UPH p
roject, with Gamuda’s 75 per cent share equating to RM2.3 billion.
This marks Gamuda’s third contract secured in financial year 2025 (FY25).
Separately, RHB Investment Bank Bhd retained its buy call on Gamuda, assigning a revised SOP-based target price of RM10.52.
‘We anticipate a profit before tax margin of around 10 per cent for the project,’ it said.
‘So far in FY25, Gamuda has secured RM6.2 billion in new contracts against our full-year replenishment target of RM20 billion.
‘Additional related projects, such as a water supply scheme and floating solar solution, may emerge in the coming quarters or next financial year,’ it added.
RHB IB projects that Gamuda’s order book target of RM40 billion to RM45 billion by the end of 2025 is within reach.
Source: BERNAMA News Agency
