RHB Research retains ‘buy’ stance on Gamuda with RM6.30 target price
KUALA LUMPUR: The earthquake with a magnitude of between 7.2 and 7.5 on the Richter scale that struck Hualien County, eastern Taiwan, on Wednesday won’t have an impact on Gamuda Bhd’s operations there, said RHB Investment Bank Bhd (RHB Research) in a note yesterday.
The research firm said Gamuda’s projects were situated at least 200km away from the epicentre.
“As such, there is no major impact coming from the said earthquake as the sites of Gamuda projects only felt a 4.0 to 4.5-magnitude on the Richter scale, which is considered to be a light earthquake that can be felt but generally causes no damage.
“There are no changes to our earnings estimates as we see no major adverse impact on Gamuda’s operations at its work sites in Taiwan,” it said.
RHB Research observed that Taiwan jobs constituted RM4.5 billion, or 19 per cent, of Gamuda’s RM24 billion outstanding order book as at the end of January.
Of the six ongoing jobs, railrelated projects have completion rates of one per cent and below, indicating that major tasks like tunnelling may not have commenced yet.
“These rail projects include the Kaohsiung Mass Rapid Transit line secured in October last year (RM3 billion with an 88 per cent effective share) and the TaoYuan City underground railway secured in October 2022 (RM1.3 billion with a 60 per cent effective share).
“Other projects in Taiwan primarily involve structures, such as sea wall reclamation and marine bridges with completion rates ranging from 75 per cent to 90 per cent as of January,” it said.
RHB Research has maintained its “buy” recommendation on Gamuda with a RM6.30 target price.