KUALA LUMPUR: RHB Research has maintained a "Buy" call on Gamuda, with a higher target price of RM5.27 from RM4.95 previously on its ability to provide a strategic hedge to any downside risks from job flows in Malaysia.
Approximately 50 per cent of Gamuda's bottomline comes from overseas.
RHB Research also said a further re-rating catalyst for the stock is a faster-than-expected rollout of big ticket infrastructure projects.
It added that Gamuda's potential to win the RM4 billion to RM6 billion MRT3 system package also serves as a catalyst, as the group has been prequalified for said package.
Moving forward, it said a key risk for the group is slower-than-expected job replenishment trends.
It expects no major job wins for Gamuda Bhd for the rest of financial year 2023 (FY23), as outcome of the Suburban Rail Loop East (SRLE) bid in Australia is likely to be revealed only in late 2023.
The investment bank said the same timeline could apply for the Mass Rapid Transit 3 (MRT3) contract rollouts following the extension of the tender validity period to end September 2023 from end June 2023 previously.
"We believe a win from any of the two SRLE packages could be in excess of RM5 billion, almost matching MRT3's major tunnelling package of approximately RM6 billion (assuming a 50 per cent joint venture share).
"Henceforth, any further MRT3 delays will not be a major concern for Gamuda," it said in a note today.
Gamuda's construction arm secured a RM3.5 billion job for Phase 1 reclamation works Penang South Island's Island A.
The group's effective outstanding orderbook now stands at RM21.5 billion.
The group also targets to secure RM25 billion worth of new jobs over FY24 to FY25.
"We believe this is manageable, as it already won RM24 billion in new contracts in FY22 to FY23, including the latest reclamation job," RHB Research noted.