Gabungan to benefit from Pan Borneo Sabah project roll-outs

KUCHING: Gabungan AQRS Bhd (Gabungan) is expected to benefit from the roll- outs of projects from the development of the Pan Borneo Sabah, analysts say.

Following an analysts’ briefing with Gabungan, MIDF Amanah Investment Bank Bhd’s research house ( MIDF Research) noted that the Public Works Department (JKR) is expected to take over the Pan Borneo Sabah project within next month.

It said, according to Gabungan’s management, its current tender is expected to continue to be valid until the end of September 2019.

“Whilst the packages tendered remain undisclosed, we understand that the ones carrying high urgency will be given priority to commence earlier. Positively, Gabungan’s precast business is expected to benefit from the rollouts, given its competitive advantage in supply chain,” it said.

Aside from the Pan Borneo Sabah, MIDF Research noted that Gabungan is already gearing up for the next tender stage of the ECRL project.

“We were informed that call for tender could take place in 4QFY19 followed by a potential awarding within the same period.

“At this moment, we are aware that land acquisition in some parts of the work areas has not fully completed until the next two to three months,” it said.

Besides Pahang, it added that the group is feeling positive in putting bids for alignment traversing Selangor.

“The alignment falls under Section C ( Mentakab to Port Klang) which is still in the design phase, due to its recent changes. On that note, we do not see the appointment of contractors taking place anytime soon for this section,” it explained.

As for Gabungan’s property segment, highlighted that its property segment contribution still subdued.

“Based on the 2QFY19 results, the group registered 86.2 per cent y- o-y lower revenue of RM2.5 million. The revenue contribution was weak, leading to a loss of RM1.8 million compared to a profitable 2QFY18.

“We believe the group is likely to log better contribution in 2HFY19, supported by the inaugural launch of E’Island Lake Haven and the relaunch of The Peak and Contours Melawati Heights.

“As of August 2019, the group has received RM95 million worth of bookings for its developments, mainly from its E’Island Lake Haven in Puchong,” it added.

It said, the contribution from its property segment in 2HFY19 is likely to improve as the group progressively convert the bookings into sales from 3QFY19 onwards.