KUALA LUMPUR: Analysts maintain a bullish outlook on Gamuda Bhd, highlighting its solid order book expansion and promising opportunities in the renewable energy (RE) sector.
The company has sustained its strong momentum with a recent RM1.8 billion engineering, procurement, and construction (EPC) contract for the 585MW Goulburn River solar farm in New South Wales, Australia, awarded to its wholly owned subsidiary DT Infrastructure (DTI) by Lightsource bp.
Hong Leong Investment Bank (HLIB) noted that the contract win boosts Gamuda's unbilled orderbook to RM31.8 billion, representing a 6 per cent increase, making DTI's acquisition in 2023 proven strategic with consistently delivering results and expanding Gamuda's exposure to renewable energy.
It added that Gamuda is well-positioned to capitalise on Australia's RE transition, with over A$15 billion worth of RE projects and A$10 billion in transmission works expected over the next two years.
Moreover, the firm pointed out the company's high certainty project pipeline, including Sabah's water supply project and the Penang Light Rail Transit (LRT), which could push its orderbook to RM40 billion by the end of 2025.
"We remain positive on the stock, driven by the upcycle in the project pipeline, differentiated strategy, and growing leverage in Australian RE," HLIB said
Similarly, RHB Research said that DTI's successful solar project win aligns with Gamuda's ambition to build a 2GW portfolio of wind and solar projects within five years.
Moreover, the firm estimated that Gamuda's RE-related projects now contribute RM4.7 billion, or 15 per cent of its total order book, and cited Australia's ambitious 82 per cent RE target by 2030, which requires 6 GW of solar and wind energy annually, as a promising pipeline for Gamuda's growth.
Both research firms pointed to Gamuda's strong execution capabilities and confidence in orderbook replenishment, as evidenced by its bullish tone during recent briefings, especially with major projects like the Upper Padas Hydroelectric Project and additional data centre contracts on the horizon, making Gamuda poised for further growth in both domestic and international markets.
HLIB has maintained a "BUY" call with a target price of RM11.03 on Gamuda.
RHB Research has also reaffirmed its "BUY" recommendation with a target price of RM11.67.