KUALA LUMPUR: Gamuda Bhd is expected to secure another data centre (DC) project in the financial year 2025 (FY25), according to RHB Research.
This is due to Gamuda's industrialised building systems (IBS) factories, which can accommodate two to three DC projects with a combined capacity of 200 megawatts (MW) simultaneously.
"A bonus for Gamuda would be if it were to clinch highway projects in Sarawak and Sabah, such as new phases of the Pan Borneo Highway and Northern Coastal Highway," it said in a note.
RHB Research said potential upcoming job wins for Gamuda within the next six months would include the Penang Light Rail Transit Segment 1 (valued at about RM4.8 billion for Gamuda's 60 per cent share in SRS Consortium).
Others will be the Upper Padas Hydroelectric Dam (estimated at RM2 billion-RM3 billion), its associated water supply scheme (at least RM4 billion) and the high-capacity signalling project for DT Infrastructure in Australia (worth at least A$500 million).
RHB Research also pointed out that Gamuda needs to secure RM11 billion-RM13 billion in new contracts to achieve its RM30 billion target order book by the end of calendar year 2024 (CY24).
This is assuming an orderbook burn rate of RM5 billion between July and December, with a balance orderbook of between RM22 billion and RM24 billion as of June.
RHB Research said Gamuda's foreign shareholding still has room to go higher, backed by robust local and overseas infrastructure pipelines at 25 per cent in May.
During the CY17 construction upcycle, Gamuda's foreign shareholding hovered between 25 per cent and 35 per cent while the peak in the last 11 years was seen in May 2013 at 48 per cent.
RHB Research raised its FY25-FY26 forecast earnings by eight per cent each, as it anticipate gradual margins improvements for Gamuda's construction arm on higher volume of incoming domestic jobs with better margins.
"We tweak our property sales recognition trends too amidst better prospects, particularly for Gamuda's local township projects, such as Gamuda Gardens in Rawang and Gamuda Cove in Kuala Langat.
"Both districts have seen growth in residential property transactions to the tune of 11 per cent and 45 per cent year-on-year (YoY) in the first quarter of 2024 (1Q24)," it added.
The firm maintained a "Buy" call on Gamuda, with a new target price of RM9.68.
RHB Research's expectation of job wins of at least RM10 billion per annum backs house three-year earnings compound annual growth rate (CAGR) 2023 to 2026 of 16 per cent.