KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest) expects Gamuda Bhd's robust orderbook to provide earnings visibility for the next two to three years.
Although the company's earnings for the first quarter ended July 31, 2024 came in below expectation, PublicInvest said it still optimistic over Gamuda's promising prospects.
"In view of the robust orderbook at RM30 billion, improving margin, and an expanding projects pipeline in both overseas and local market, boosted by booming data centre, we maintain our earnings forecasts for now," PublicInvest said.
The firm kept its "outperform" rating on Gamuda with the target price unchanged at RM10.40 a share.
It said the property developer's outstanding construction orderbook reached an all time-high estimated at RM30 billion.
The company's near-term performance is expected to remain driven by overseas construction activities as projects in Australia and Taiwan continue to gain momentum.
"In Australia, Gamuda has been shortlisted for multiples opportunities in the solar and pumped hydro segments.
"Looking ahead, the group expects new projects wins to come from domestic including the Penang LRT and Ulu Padas Water Project, as well as data centre projects with better margins to drive its engineering and construction (E&C) earnings," it said in a note.
PublicInvest added that Gamuda's unbilled property sales are now at about RM6 billion.
It is targeting RM6 billion in sales for financial year 2025 (FY25) and plans to incorporate two or three quick turnaround projects (QTPs) annually, in addition to the 10 QTPs currently in its portfolio.
PublicInvest said Gamuda is making significant strides in the cloud business, adopting a value added-approach to serve clients across the private and public sectors, targeting a market valued at RM36 billion.
At 9.25am, Gamuda rose 13 sen or 1.4 per cent to RM9.73, valuing the stock at RM27.6 billion.