GAMUDA: Major Renewable Energy Infrastructure Wins Bolster Outlook, Buy Rating Maintained

A leading infrastructure player has significantly bolstered its future prospects with major wins in Australia’s renewable energy infrastructure sector, leading to the maintenance of a “Buy” recommendation from analysts. The company’s strategic positioning within the burgeoning green energy market is seen as a key driver for long-term growth.

Strategic Project Successes

Central to this positive outlook is the selection of its subsidiary, DT Infrastructure (in a 50:50 joint venture with Samsung), as the preferred bidder for the Marinus Link project. This ambitious undertaking involves the construction of a 345-kilometre undersea and underground electricity and data interconnector, spanning from North West Tasmania to the Latrobe Valley in Victoria, Australia. With an estimated project value of c.AUD4.8 billion, the first stage (750MW) is slated to begin construction in calendar year 2026, targeting completion by 2030. Formal contract awards are anticipated as early as September.

Beyond the Marinus Link, the company is poised for further growth in the renewable energy sector. By end-CY25, it expects to secure additional RE-linked Engineering, Procurement, Construction, and Commissioning (EPCC) projects, including an estimated AUD0.9 billion share in the Oven Mountain Pumped Hydro project in New South Wales, also in a joint venture. Early contractor works for the Capricornia Energy Hub and Carmody’s Hill Wind Farm have already been secured. Analysts view this strong project pipeline as aligning perfectly with Australia’s ambitious target of achieving 82% renewable energy in its electricity grids by 2030.

Financial Outlook and Valuation

Despite these significant developments, earnings estimates remain unchanged at present, pending finalisation of the contract awards. However, analysts believe there is considerable scope for valuation upside. This is attributed not only to its involvement in these impactful renewable energy projects in Australia and Malaysia but also to its robust data centre capabilities, both of which are expected to generate recurring income growth. The current valuation stands at 23x FY26F P/E, a premium to the Bursa Malaysia Construction Index’s 10-year mean P/E of 14x, yet justified by the strong growth drivers.

Identified Risks

A primary risk identified by analysts is the potential for slower-than-expected job replenishment, which could impact future revenue streams if not adequately managed.