Maybank IB positive on Gamuda’s prospects, raises target price to RM7.25

• The research house said Gamuda’s FY2024 year-to-date win is circa RM9 billion and it expects to secure another estimated RM14 billion by end-CY2024, bringing forward its RM25 billion target for FY2024-2025E by half a year.

KUALA LUMPUR (June 21): Maybank Investment Bank has maintained its “buy” rating on Gamuda Bhd (KL:GAMUDA) at RM6.44 and adjusted the company's FY2024E earnings by -5%, FY2025E earnings by +2% and FY2026E earnings by +3%. It also raised Gamuda's realised net asset value (RNAV) target price to RM7.25 (from RM6.85).

In a note on Friday, the research house said it remains positive on Gamuda’s prospects for both its engineering and construction (E&C) and property operations.

Maybank IB said Gamuda remains optimistic on its E&C job win prospects.

The research house said Gamuda’s FY2024 year-to-date win is circa RM9 billion and it expects to secure another estimated RM14 billion by end-CY2024, bringing forward its RM25 billion target for FY2024-2025E by half a year.

“Pipeline projects include the Mutiara LRT Package 1 (Silicon Island to Komtar), Upper Padas HEP & water infra, Melbourne sub-urban rail loop, and a high capacity signalling project in Perth.

“Having secured RM2 billion in data centre jobs last month — RM1.7 billion in Elmina Business Park and RM300 million in Cyberjaya — Gamuda is in talks still with data centre players.

“Its two IBS plants in Sepang and Banting can support another sizeable data centre project,” it said.

Maybank IB said Gamuda currently trades at 15.3x FY2025E price-to-earnings ratio (PER), which is its mean valuation since 2010.

“Our revised target price of RM7.25 implies 17.3x FY25E PER or 0.5SD above mean.

“Our target price is RNAV based with its E&C ops valued on 18x FY25E PER (unchanged) and property ops on PV of future profits (unchanged),” it said.

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