GAMUDA: Orderbook Expansion and Strategic Growth Underpin Positive Outlook
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading investment bank has maintained its “Buy” recommendation, citing robust orderbook growth and strategic expansion, particularly in Australia, as key drivers for a positive future outlook. The bank emphasizes the company’s strong pipeline of infrastructure and clean energy projects expected to fuel its growth trajectory.
Growth Drivers and Strategic Expansion
The firm’s significant presence in Australia, through its engineering and infrastructure entities, continues to be a substantial contributor to overall revenue. While the proportion of Australian revenue is anticipated to see a slight moderation in the coming fiscal years (FY27F-28F), this will be complemented by the anticipated commencement of more local high-margin projects in its home market. This strategic focus on large-scale infrastructure and renewable energy developments in Australia is a key factor underpinning the company’s long-term growth.
Robust Orderbook and Project Pipeline
The engineering arm in Australia is actively pursuing an impressive opportunity pipeline exceeding AUD50 billion for FY27-29, with over AUD10 billion in active tenders currently in progress. Notably, clean energy developments such as the Weasel Solar Farm and Cellars Hill Wind Farm have either received federal approval or are under negotiation, poised for construction commencement. Major transmission projects, including the Hunter Transmission Project (estimated at AUD1.5 billion) and the New England Renewable Energy Zone (estimated at AUD3.7 billion), are also advancing, with the latter recently being shortlisted.
Similarly, the infrastructure division in Australia currently manages projects valued at approximately AUD2.5 billion, representing a significant portion of the firm’s total orderbook. The ambition is to double this to AUD5 billion by FY27-28, expanding across key sectors such as rail infrastructure, roads and bridges, defence, and energy. An additional AUD2 billion worth of preferred/early contractor involvement (ECI) projects further enhances the pipeline, carrying a high likelihood of conversion into full contracts. Key near-term projects include the Marinus Link and Carmody’s Hill Farm, each estimated at MYR1 billion.
The current balance orderbook stands at a healthy MYR39.3 billion as of end October 2025. With an assumed average monthly burn rate of MYR1.4 billion, the company needs to secure approximately MYR3.5 billion in new jobs to reach its target of MYR40-45 billion by end-CY25. Conversions from existing ECI works, such as the Carmody’s Hill Wind Farm, and the formal award of the Marinus Link project, along with potential data centre awards in the Klang Valley, are expected to contribute significantly to this target.
Valuation and Outlook
Despite the company trading at a premium relative to the broader construction index, this valuation is justified by its robust capabilities in data centre and renewable energy projects across both Malaysia and Australia. The substantial Australian public infrastructure pipeline, projected at AUD242 billion for the period 2024-2029, further supports a positive long-term outlook for the firm.
Key Risk
A primary risk identified in the report is the potential for slower-than-expected job replenishment trends, which could impact future earnings growth.
