ANALYSTS UPBEAT ON GAMUDA PERFORMANCE

KUALA LUMPUR: Analysts are optimistic about Gamuda Bhd’s prospects in the financial year ending July 31, in anticipation of stronger influx of mega infrastructure projects.

MIDF Research said the projects could add another 15 per cent to Gamuda’s unbilled order book of about RM7.7 billion.

“Gamuda may win sub-contracting jobs from the Gemas-Johor Baru double-track railway project awarded to YTL Corp,” it said in a note yesterday.

MIDF noted that Gamuda’s profit-aftertax and non-controlling interests in the six months of the 2018 financial year increased 26.1 per cent to RM414.2 million, reflecting a positive revenue increment from the construction and property segments.

“Gamuda’s six-month results met our estimates as we have assigned lower construction progress billings rate for the cumulative period due to project completion.”

MIDF has maintained its “neutral” call on Gamuda with an adjusted target price of RM5.25 per share.

Meanwhile, Kenanga Research said Gamuda’s management remained ambitious in securing mega projects such as the Mass Rapid Transit (MRT) 3.

“However, we only expect more significant profit contributions from 2020 onwards.”

Kenanga also adjusted its earnings forecast for Gamuda, with a higher target price of RM5.50 from RM5.45 previously.

“Risks to our call include unexpected delay of MRT Sungai Buloh–Serdang–Putrajaya Line project, another deadlock in Syarikat Pengeluar Air Selangor Sdn Bhd takeover deal, higher-than-expected input costs and lower-than-expected property sales,” it added.