KUALA LUMPUR: Analysts laud Gamuda Bhd's purchase of 157 hectareland in Springhill Industrial Park, Port Dickson, for boosting its data centre partnership model.
Hong Leong Investment Bank Bhd (HLIB) Research said the model will leverage on existing relationships with hyperscale clients for a bundled offering involving land, water and renewable energy (RE) power (enabling green DCs).
"We believe this strategy is unlikely to be replicated by other competitors as it requires a big balance sheet, track record in water infrastructure, and renewable energy capabilities."
"If all goes to plan, we believe Gamuda will be able to offload DC development ready land parcels at a higher price while securing DC construction contracts potentially at higher margins," it said.
In addition, HLIB said Gamuda is currently able to deliver eight concurrent DC builds post expansion of its Digital IBS (industrialised building system) facilities and DC teams.
HLIB expects this to lead to a sizable long term stream of high margin DC construction contracts and should not stress its balance sheet (staying away from developer model).
"We preliminarily estimate a huge potential DC powerbank of 700 megawatt to one gigawatts unlocking a sizable long term DC construction pipeline."This coupled with acceleration of renewable energy (RE) projects increases upside risk probability to its RM40-45 billion end calendar year of 2025 (CY25) target."No change in forecasts pending completion. Maintain Buy, with unchanged TP of RM5.50 (post adjusting for recent bonus issue)," it added.
Gamuda is acquiring 157.4 hectares of freehold land in Springhill Industrial Park, Port Dickson, from West Synergy SB, a joint venture (JV) between MUI Properties and Chin Teck Plantations for RM424.4 million. The land is planned for development of cloud/data centre (DC) infrastructure.
RHB Investment Bank Research said Gamuda's gameplan to bundle other service components related to DCs – namely water supply and even
power (potentially renewable energy (RE)) – is not foreign to it.
It has a track record in building and operating the Sungai Selangor Water Supply Scheme Phase 3 and its RE exposure is backed by associate ERS Energy, which is involved in solar plant-related services.
It made no changes to its estimates pending the deal completion and further details on the leasing model (if applicable) for the DC offtaker.
It maintained its 'Buy' call ont he company with a new target price of RM5.83 a share. Ends