Analysts remain optimistic on Gamuda amid robust order book growth

• RHB also noted that Gamuda is pursuing A$25 billion (RM70.77 billion) worth of renewable energy projects in Australia.

KUALA LUMPUR (Dec 17): Analysts remain bullish on Gamuda Bhd (KL:GAMUDA) after the group's latest Australian job win, increasing its order book to approximately RM31.8 billion.

Gamuda's subsidiary DT Infrastructure Pty Ltd recently secured a RM1.8 billion contract from Lightsource bp Renewable Energy Investments Ltd for the Goulburn River Solar Farm in New South Wales, Australia.

The Goulburn River Solar Farm, with a capacity of 585MW, is expected to supply renewable energy to 225,000 homes in New South Wales. The project is slated to commence in January 2025, with a 24-month timeline for completion.

According to RHB, the recent win shows Gamuda’s commitment to growing its renewable energy order book, which includes the Upper Padas Hydroelectric Project in Sabah.

This segment currently stands at approximately RM4.7 billion, representing 15% of the group’s total outstanding order book.

RHB also noted that Gamuda is pursuing A$25 billion (RM70.77 billion) worth of renewable energy projects in Australia.

This aligns with the country’s target to achieve an 82% renewable energy mix by 2030, which necessitates the addition of 6GW each of wind and solar capacity annually over the next four to five years.

RHB maintains its “buy” call on Gamuda, with an unchanged target price of RM11.67, as the latest job win is within FY2025 job replenishment assumption of RM25 billion.

Additionally, the group’s solar energy initiatives, led by DT Infrastructure, align with Gamuda’s goal of building a 2GW renewable energy portfolio in Australia over the next five years. This portfolio currently stands at approximately 813MW.

In a separate note, Phillip Capital projects Gamuda’s new projects to yield a 4%-5% profit before tax (PBT) margin, consistent with small-scale overseas construction projects.  

Over the FY2025-FY2027 period, these projects are expected to contribute around RM90 million in PBT.

The firm also emphasised that Gamuda’s expanding presence in Australian renewable energy projects positions the group to capitalise on the nation’s renewable energy ambitions.

Philip Capital maintains its “buy” recommendation with a target price of RM11.10. The research house also anticipates near-term order wins from domestic projects, including the Penang Light Rail Transit system (approximately RM5 billion), a Sabah water treatment plant (approximately RM3 billion), and various data centre projects.

At the time of writing on Tuesday, Gamuda shares were trading unchanged at RM9.60, valuing the company at RM27.28 billion. Year to date, stock has gained 109.15%.     

According to Bloomberg, there are 19 “buy” calls on Gamuda and two “hold” ratings.

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