KUALA LUMPUR: Gamuda Bhd's recent win in a RM2.3 billion high-capacity signalling project in Western Australia via DT Infrastructure (DTI) is expected to broaden the company's scope and geographical reach in Australia, said CGS International Research.
The research house is positive on this win because it compensates for the loss of the Suburban Railway Loop (SRL) East second package.
Meanwhile, the firm said the acquisition of DTI is bearing fruit as Gamuda does not have expertise in system works, and it broadens Gamuda's positioning in the construction value chain.
"This is also the first win for Gamuda in Western Australia, also aided by DTI, which has been present in the state," it said.
CGS International believes Gamuda is also a step closer to reaching its RM25 billion new order target by the end of the calendar year 2024 (CY24).
It said year-to-date (YTD) wins remain at RM9 billion, as this is merely formalising the initial media statement by the state government on April 24.
"We expect incremental new wins for the rest of CY24 to be local and include Penang LRT, the BOT Upper Padas hydroelectric power plant, and a water treatment plant in Sabah.
"Management said that it is confident of clinching another data centre win by end-CY24, adding to its RM2 billion orderbook from data centres," it said.
Overall, CGS International reiterates its add call with a target price of RM9.50 on Gamuda.
The firm continued to like Gamuda given its diversified orderbook, increasing data centre exposure, and growing property business.
"Another potential catalyst is a possible inclusion as a FBM KLCI constituent.
"The next review will be in December 2024, and Gamuda is already on the FBM KLCI Reserve List," it added.