PETALING JAYA: Gamuda Bhd aims to double its revenue to RM30bil by the financial year ending July 31, 2028 (FY28) from FY24, implying a compounded annual growth rate of about 20%.
Unveiling its five-year business plans and group revenue projections, the company said at its recent results briefing that it expected growth to be driven by its engineering and construction (E&C) and property divisions, according to several brokerages.
Maybank Investment Bank (MaybankIB) Research noted the target growth in E&C was expected to come from Gamuda’s overseas operations, while that of its property operations would likely come from quick turnaround property projects overseas.
Similarly, Hong Leong Investment Bank (HLIB) Research shared Gamuda’s management was expecting all business areas to chart strong growth except for domestic construction – flattish by comparison.
Both brokerages reiterated “buy” on Gamuda, with MaybankIB Research keeping its target price for the counter at RM7.25, while HLIB Research raising its target price to RM7.80 from RM6.88 previously.
For the third quarter to April 30, 2024 (3Q24), Gamuda’s net profit increased 5.6% year-on-year (y-o-y) to RM235.8mil, as revenue grew 20.5% y-o-y to RM2.49bil.
For the nine-month period to April 2024 (9M24), Gamuda’s net earnings were down by 59.7% y-o-y to RM639.6mil, although revenue surged 79% y-o-y to RM8.63bil.
Analysts reckoned the results were largely in line with expectations, adding that they expected Gamuda to post better results for 4Q24.
“We expect a stronger 4Q24, driven by margins uptick at its E&C operations and higher progress billings at its property projects,” MaybankIB Research said.
Year-to-date, Gamuda’s E&C wins totalled RM9bil, lifting its outstanding order book to RM24.2bil as at end-April 2024, while its unbilled sales at its property division totalled RM6.7bil.
“Gamuda expects its order book to comfortably surpass RM30bil over the near-term,” MaybankIB Research said, noting pipeline projects included the Mutiara LRT Segment 1 (Silicon Island to Komtar), and the Melbourne suburban rail loop, and a high capacity signalling project in Perth in Australia.
“Over at its property operations, 3Q24 pre-sales rose to RM1bil, lifting 9M24 pre-sales to RM2.3bil. Gamuda maintains its pre-sales target of RM5bil for FY24,” it added.
HLIB Research said it estimated a potential contract wins of more than RM11bil for Gamuda for the second half of 2024.
UOB Kay Hian (UOBKH) Research said it was optimistic of a stronger 4Q24 performance by Gamuda, underpinned by the growth of the construction and property development segments.
“The near-term outlook remains rosy as management foresees a number of domestic and overseas projects materialising in the coming months. This could lift its order book above RM30bil by end-2024, setting a new record for the group,” UOBKH Research said.“We also anticipate its profit margins in the construction segment to improve gradually as local projects progress further while Australia projects also achieve better economies of scale,” it added.
UOBKH Research maintained its “buy” call on Gamuda with an unchanged target price of RM7.34.
“Gamuda stands to be the prime beneficiary of the upcoming mega infrastructure projects both locally and regionally. We also like the company for its superior earnings visibility backed by a robust order book as well as progressive new property launches,” it explained.
Meanwhile, in a filing with Bursa Malaysia yesterday, Gamuda said its founder and managing directo Datuk Lin Yun Ling, had exercised his share options under the Employees’ Share Options Scheme to acquire 1.2 million shares at RM2.55 a piece in the company.
According to the filing, Lin would have purchased the block of shares for RM3.06mil.