Kuala lumpur: Gamuda Bhd remains the top pick for the construction sector by MBSB Investment Bank Bhd, supported by an all-time high order book of RM35.8 billion and a geographically diversified portfolio across construction and property.
According to BERNAMA News Agency, MBSB stated that Gamuda is rapidly expanding its footprint in the utilities sector. The company is leveraging its construction expertise and financial strength to undertake asset ownership to rebuild its recurring income stream, which the group enjoyed before exiting the toll concession business in 2022.
The company has secured RM3.31 billion of leasehold land in Chencharu Close from the Housing Development Board of Singapore. The preliminary proposed development by the group includes up to 875 residential units and a maximum of 135,625.27 square feet of commercial space. MBSB expressed positivity about this development, noting that it continues Gamuda’s presence in the Singapore property scene following the completion of the OLA project last year. The purchase consideration may be partly funded via bank borrowings, but it is not expected to materially impact the balance sheet.
The development is expected to complement the group’s quick turnaround project (QTP) strategy, particularly in Vietnam. Management has set a sales target of RM5.5 billion for the financial year 2026 (FY2026), underpinned by continued momentum from Vietnam QTPs and new mid-to-upper range launches in Malaysia with a combined gross development value (GDV) of over RM2 billion. Management is also in the process of closing up to five deals in Vietnam with a GDV of RM5 billion to RM6 billion.
MBSB is maintaining its ‘buy’ recommendation on Gamuda, with an unchanged sum-of-the-parts derived target price (TP) of RM6.35. Meanwhile, CGS International Securities Malaysia Sdn Bhd reiterated its ‘add’ rating for Gamuda, citing its clear pipeline of potential projects and diversified order book spanning four markets – Malaysia, Taiwan, Australia, and Singapore. Its unchanged TP of RM7.30 is based on market capitalisation and an order book of one time, assuming a sustainable order book of RM42.5 billion.
As of 10.25 am, Gamuda’s shares were six sen higher at RM5.58 with 2.15 million shares traded.