Gamuda to only secure RM2 billion new jobs annually in FY18-FY20F — Analysts
KUCHING: Despite having several mega projects on Gamuda Bhd’s (Gamuda) radar, analysts are conservatively assuming that the group will only secure RM2 billion new jobs annually for its forecasts for financial years 20182020 (FY18 to FY20F).
According to AmInvestment Bank Bhd (AmInvestment Bank), Gamuda recently updated analysts on the group’s strategy on key projects it is currently pursuing such as MRT3, KL- Singapore high-speed rail (HSR) and East Coast Rail Link (ECRL).
“With these mega projects on its radar, Gamuda guided for job wins of RM6 billion to RM8 billion annually over the short term,” the research firm said.
“Given the lumpy size and low predictability in terms of the timing of the award, our forecasts conservatively assume Gamuda to only secure RM2 billion new jobs annually in FY18-20F.”
It added that Gamuda’s construction order backlog stands at RM7.3 billion at present.
On Gamuda’s property segment, AmInvestment Bank noted that the group recorded RM903 million property sales in the first quarter of FY18 (1QFY18), on track to achieve its FY18F sales target of RM3.5 billion.
“Overseas projects (Vietnam, Singapore and Australia) c o n t i nued to dominat e, contributing about two thirds of total sales in 1QFY18, with local projects making up the balance,” it said.
This was consistent with the research firm’s view that these overseas markets are ahead of Malaysia in terms of their recent boom-bust cycles.
“They have been through the consolidation phase and are now on a recovery path.”
Overall, AmInvestment Bank continued to like Gamuda given the group’s market leader position in the local construction market backed by its tunnelling expertise and track record as project delivery partner ( PDP) in rail projects, resilient property profits underpinned by overseas projects and local township projects that are well received by the market and recurring earnings from toll road and water concessions.