Gamuda's core profit may have risen up to 12% in 3Q — RHB

• Gamuda's core net profit could come in between RM230 million and RM250 million for the third quarter ended March 31, 2024 (3QFY2024), the research house said in an earnings preview note.

KUALA LUMPUR (June 24): Gamuda Bhd’s (KL:GAMUDA) core net profit may have risen between 3% and 12% in the third quarter from a year ago, driven by better billings from overseas projects, according to RHB Investment Bank.

Gamuda's core net profit could come in between RM230 million and RM250 million for the third quarter ended March 31, 2024 (3QFY2024), the research house said in an earnings preview note. Gamuda is expected to release its results on June 25.

“We continue to favour Gamuda for its sizeable overseas exposure while maintaining relevance in the domestic space,” RHB said. In particular, the research house expects the Sydney Metro West project to underpin 3QFY2024 results, it noted.

Gamuda is expected to book a recurring net profit of RM909 million for the financial year ending July 2024 (FY2024), RHB estimates show. The consensus’ full-year forecast of Gamuda’s net profit is RM984 million for FY2024.

The research house maintained its “buy” recommendation on the stock, with a higher target price (TP) of RM7.69 from RM7.08 previously. That compares to the 12-month TP of RM6.68 by 19 analysts covering the stock, according to Bloomberg.

A wide majority of 17 analysts have a “buy” call on Gamuda, with only two “sell” recommendations.

Gamuda’s initial target to secure RM25 billion worth of new jobs over FY2024-FY2025 may likely be surpassed given its robust pipeline, RHB noted. So far this year, Gamuda has won about RM7 billion worth of new jobs, based on its exchange filings.

RHB predicts Gamuda's job target to be RM13 billion for FY2024 and RM15 billion for FY2025.

An upcoming near-term job win for Gamuda may come from the Suburban Rail Loop (SRL) east tunnelling package in Melbourne, estimated to be worth up to A$1.5 billion (RM4.7 billion) for Gamuda’s 50% share, RHB said.

Other potential projects for Gamuda include a line-wide package for the SRL project, highways in Victoria, and the high-capacity signalling project in Perth worth over A$1 billion.

Domestically, RHB said investors should look out for Penang Light Rail Transit Mutiara Line Segment 1, which could be awarded in September or October, estimated at RM4.8 billion, as well as the expansion of the Penang International Airport that costs RM1.5 billion.

Shares of Gamuda rose 13 sen or 2.04% to RM6.51 as of 4.22pm on Monday, giving it a market capitalisation of RM18.04 billion.

Year to date, the counter has risen over 41% amid a boom in construction stocks, as investors bet on the government's rollout of major infrastructure projects. A slew of high-margin jobs, particularly to build data centres, have also boosted shares of select companies, including Gamuda.

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