KUALA LUMPUR: Gamuda Bhd started the new financial year strongly with a RM203 million net profit, driven by higher work progress from its construction projects as well as higher property billings, said PublicInvest Research.
In a note today, the research house said first quarter (Q1) 2018 net profit constituted 27 per cent and 26 per cent of PublicInvest and consensus full year estimates.
PublicInvest said the Group’s job prospects are still good despite the recent setback in Klang Valley Mass Rapid Transit (KVMRT) Line 3 which is now foreign-financed using the design, finance, build model from the project delivery partner model in the previous two phases.
It said the Group is still eyeing sub-contracting roles which could be substantial as well, with 40 per cent to 50 per cent of KVMRT Line 3’s contract value allocated for local contractors.
“We understand that tenders are to be called soon with outcome likely in mid-2018.
“With three mega rail projects estimated at combined value of RM150 billion to be implemented over 2018 to 2025, Gamuda is expected to bid for all three projects with jobs replenished said to be around RM6 billion to RM8 billion per annum,” it said.
PublicInvest said Gamuda’s outstanding orderbook as at October 2017 is RM7.3 billion.
PublicInvest has maintained its “outperform” call on Gamuda with an unchanged target price of RM6.20.
“We still like Gamuda and expect earnings to pick up pace from financial year 2018 and to continue to benefit from the large infrastructure projects expected to be rolled out over the next two to three years,” it said.