Gamuda Berhad
Water Flows, Earnings Grow
Target Price
TP: RM6.43 (+27.8%)
Last Traded
RM5.03
(ESG: ★★★★)
GAMUDA JV Secures RM5bn Water Infrastructure Project in Perak
The Perak State Government has awarded a 50:50 joint venture between GAMUDA and Perbadanan Kemajuan Negeri Perak (PKNP) the development and long-term operation of a critical water infrastructure project in Kerian, Northern Perak. This initiative forms the backbone of the Northern Perak Water Supply Scheme (NPWSS) and carries a gross development value of RM5bn.
The project will be delivered under a privatised concession structure spanning a minimum of 40 years. It aims to address long-standing water shortages across agricultural, domestic, and industrial segments in Northern Perak and neighbouring regions. Under its scope, the JV will be responsible for treating and distributing potable water within the Kerian district, ensuring reliable supply to the Kerian Integrated Green Industrial Park (KIGIP), and facilitating the sale of surplus treated water to Penang.
At full capacity, NPWSS will divert up to 1,500mn litres per day (MLD) of raw water from Sungai Perak to the Bukit Merah Dam. Of this, 500 MLD will be prioritised for irrigation purposes, with the balance earmarked for treatment to meet growing consumption demand.
To note, PKNP, as the Perak State’s economic development agency, provides institutional alignment and policy backing to the project, underpinning the State’s long-term ambitions for resilient infrastructure and regional water security.
Our Views
We are positive on this latest mandate, which marks a meaningful step forward in GAMUDA’s strategy to diversify its earnings base into recurring income streams. This follows the group’s earlier involvement in the Sabah Ulu Padas Water Scheme and further reinforces its credentials in sustainable infrastructure delivery.
The privatisation terms, which is expected to include the detailed water tariff structure, are expected to be finalised by end-October 2025. We anticipate that the concession will adopt a Build-Operate-Transfer (BOT) model, consistent with prevailing market practice for such infrastructure assets.
To meet the target operational timeline by 2030, we expect engineering, procurement, construction and commissioning (EPCC) works to be awarded to GAMUDA by 1QCY26, backed by its proven technical capabilities. Based on our assumptions, the EPCC contract could be worth at least RM4.5bn, representing c.90% of the total development value. Assuming a PBT margin of 10-12%, in line with management guidance, we estimate a cumulative net profit contribution of RM342mn-RM410mn throughout the construction period.
Share Information
| Bloomberg Code | GAM MK |
| Stock Code | 5398 |
| Listing | Main Market |
| Share Cap (mn) | 5,773.1 |
| Market Cap (RMmn) | 29,038.7 |
| 52-wk Hi/Lo (RM) | 5.38/3.47 |
| 12-mth Avg Daily Vol (‘000 shrs) | 24,216.1 |
| Estimated Free Float (%) | 86.3 |
| Beta | 1.6 |
Major Shareholders (%)
| EPF | 15.7% |
| Amanah Saham Nasional | 4.1% |
Forecast Revision
| FY25 | FY26 | |
|---|---|---|
| Forecast Revision (%) | 0.0 | 3.6 |
| Net profit (RMm) | 1,005.9 | 1,380.5 |
| Consensus | 1,002.0 | 1,385.0 |
| TA’s / Consensus (%) | 100.4 | 99.7 |
| Previous Rating | Buy (Maintained) | |
| Consensus Target Price | 5.56 | |
Financial Indicators
| FY25 | FY26 | |
|---|---|---|
| Net Debt / Equity (%) | 51.0 | 50.3 |
| FCPS (sen) | (16.2) | (5.3) |
| P/CFPS (x) | (31.0) | (95.0) |
| ROA (%) | 3.8 | 5.2 |
| NTA/Share (sen) | 1.8 | 2.0 |
| Price/NTA (x) | 2.7 | 2.6 |
Share Performance (%)
| Price Change | GAMUDA | FBM KLCI |
|---|---|---|
| 1 mth | 4.8 | (0.6) |
| 3 mth | 29.3 | 2.3 |
| 6 mth | 18.1 | (2.8) |
| 12 mth | 26.5 | (7.0) |
(12-Mth) Share Price relative to the FBMKLCI chart omitted. Source: Bloomberg
Impact & Valuation
Impact
Following model recalibration, we have revised our FY26-27F earnings upwards by 3.6% and 3.9%, respectively.
Valuation
Post earnings adjustment, we raise our SOP-derived TP to RM6.43 (from RM6.13 previously), incorporating a 3% ESG premium underpinned by our 4-star ESG rating. Maintain Buy recommendation.
Exhibit 1: Sum-of-Parts Valuation
| Segment | Valuation | Segment Value (RMmn) |
|---|---|---|
| Construction | 29x CY26 Earnings | 27,822.82 |
| Property | 35% Discount to RNAV | 9,061.04 |
| Equity value | 36,883.86 | |
| Number of Shares | 5,909.02 | |
| Equity value per share | 6.24 | |
| ESG Premium: +3% | 0.19 | |
| Target Price | 6.43 |
Exhibit 2: YTD New Job Wins for FY24-25
| New Project | Country | Award Date | Effective Stake | |
|---|---|---|---|---|
| % | Contract Value (RM bn) | |||
| Kaohsiung MRT Metropolitan (Yellow Line) Civil Engineering Package YCOI | Taiwan | Oct-23 | 88.0 | 3.3 |
| West Coast Stations and Tunnels, MRT Cross Island Line (Phase 2) | Singapore | Dec-23 | 100.0 | 1.7 |
| Hyperscale Data Centre in Elmina Business Park IA | Malaysia | May-24 | 100.0 | 1.7 |
| AIMS Data Centre Phase 3 & 4 | Malaysia | Jun-24 | 100.0 | 0.3 |
| Metronet High-Capacity Signalling Project | Australia | Jul-24 | 46.0 | 2.3 |
| Boulder Creek Wind Farm Project | Australia | Sep-24 | 100.0 | 0.7 |
| Ulu Padas Hydroelectric Project | Malaysia | Sep-24 | 75.0 | 2.3 |
| Design & build of Xizhi Donghu Mass Rapid Transit Construction Turnkey Project | Taiwan | Oct-24 | 75.0 | 3.2 |
| Foundation, Civil, Structural and Architectural Works for BCEI’s Data Centre Building | Malaysia | Nov-24 | 100.0 | 0.5 |
| EPC works for Goulburn River Solar Farm, New South Wales | Australia | Dec-24 | 100.0 | 2.8 |
| Penang LRT – Segment I | Malaysia | Jan-25 | 60.0 | 5.0 |
| 345kV Gangfeng Zhongke, Zhongke~Hengshan Underground Transmission Line (3rd Section) | Taiwan | Mar-25 | 50.0 | 0.3 |
| Enabling works for Port Dickson DC Development, including water treatment plant and off-river storage | Malaysia | May-25 | 100.0 | 1.0 |
| Construction of Wharf and Connecting Roads (Bridges) for the Kaohsiung Port Intercontinental LNG Terminal Construction Project | Taiwan | Jun-25 | 70.0 | 2.6 |
| Total | 27.7 | |||
Source: Company, TA Research
Financials & Orderbook
Exhibit 3: Geographic Breakdown of GAMUDA’s RM37.2bn Unbilled Orderbook
The geographic breakdown of the orderbook is as follows:
- Malaysia: 38.7%
- Australia: 28.2%
- Taiwan: 26.9%
- Singapore: 6.2%
Source: Company, TA Research
Earnings Summary
Profit & Loss (RMmn)
| FYE July 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Revenue | 8,220.4 | 13,346.7 | 15,160.8 | 18,885.9 | 21,671.9 |
| EBITDA | 1,023.0 | 1,111.0 | 1,583.4 | 2,067.0 | 2,444.8 |
| Dep. & amortisation | (120.2) | (165.1) | (188.6) | (221.2) | (253.8) |
| Net finance cost | (78.4) | (173.4) | (183.8) | (183.8) | (183.8) |
| PBT | 1,057.8 | 1,098.1 | 1,211.0 | 1,661.9 | 2,007.1 |
| Taxation | (221.1) | (155.1) | (171.0) | (234.7) | (283.4) |
| MI | (166.7) | (30.9) | (34.1) | (46.7) | (56.4) |
| Net profit | 1,838.4 | 912.1 | 1,005.9 | 1,380.5 | 1,667.2 |
| Core net profit | 716.1 | 875.3 | 1,005.9 | 1,380.5 | 1,667.2 |
| GDPS (sen) | 50.0 | 16.0 | 8.0 | 10.0 | 11.1 |
| Div Yield (%) | 9.9% | 3.2% | 1.6% | 2.0% | 2.2% |
Balance Sheet (RMmn)
| FYE July 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Fixed assets | 1,655.5 | 1,620.3 | 1,931.7 | 2,210.5 | 2,456.7 |
| Others | 6,993.0 | 8,145.8 | 8,145.8 | 8,145.8 | 8,145.8 |
| NCA | 8,648.5 | 9,766.1 | 10,077.5 | 10,356.3 | 10,602.5 |
| Cash and cash equivalent | 2,830.6 | 2,597.4 | 1,638.0 | 1,325.1 | 1,307.9 |
| Others | 12,373.1 | 14,294.3 | 14,688.5 | 15,498.0 | 16,890.1 |
| CA | 15,203.7 | 16,891.7 | 16,326.5 | 16,823.1 | 18,197.9 |
| Total assets | 23,852.2 | 26,657.8 | 26,404.0 | 27,179.4 | 28,800.4 |
| ST borrowings | 1,409.7 | 1,242.0 | 1,242.0 | 1,242.0 | 1,242.0 |
| Other liabilities | 5,460.6 | 6,652.8 | 5,867.0 | 5,852.7 | 6,463.4 |
| CL | 6,870.3 | 7,894.8 | 7,108.9 | 7,094.7 | 7,705.3 |
| Shareholders’ funds | 10,791.1 | 11,365.1 | 11,897.3 | 12,686.9 | 13,697.3 |
| MI | 135.5 | 156.9 | 156.9 | 156.9 | 156.9 |
| LT borrowings | 5,514.0 | 6,564.6 | 6,564.6 | 6,564.6 | 6,564.6 |
| Other LT liabilities | 541.3 | 676.3 | 676.3 | 676.3 | 676.3 |
| Total capital | 23,852.2 | 26,657.8 | 26,404.0 | 27,179.4 | 28,800.4 |
Cash Flow (RMmn)
| FYE July 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| PBT | 1,057.8 | 1,098.1 | 1,211.0 | 1,661.9 | 2,007.1 |
| Adjustments | 198.7 | 338.5 | 372.4 | 405.0 | 437.6 |
| Changes in WC | (165.7) | (544.1) | (1,180.1) | (823.8) | (781.4) |
| Others | (1,633.6) | (585.0) | (34.1) | (46.7) | (56.4) |
| Operational cash flow | 404.4 | 152.4 | 198.2 | 961.7 | 1,323.4 |
| Capex | (793.3) | (938.1) | (500.0) | (500.0) | (500.0) |
| Others | 1,189.8 | 705.3 | (429.1) | 0.0 | 0.0 |
| Investment cash flow | 396.5 | (232.8) | (929.1) | (500.0) | (500.0) |
| Debt raised/(repaid) | 2,113.4 | 846.3 | 0.0 | 0.0 | 0.0 |
| Dividend | (1,060.7) | (74.1) | (473.8) | (590.9) | (656.9) |
| Others | (281.6) | (195.0) | (183.8) | (183.8) | (183.8) |
| Financial cash flow | 771.2 | 577.2 | (657.6) | (774.7) | (840.7) |
| Forex effect | (20.7) | (33.7) | 0.0 | 0.0 | 0.0 |
| Deposit | (338.9) | (102.9) | (102.9) | (102.9) | (102.9) |
| Net cash flow | 942.8 | (199.5) | (959.4) | (312.9) | (17.2) |
| Beginning cash | 1,908.4 | 2,830.6 | 2,597.4 | 1,638.0 | 1,325.1 |
| Ending cash | 2,830.6 | 2,597.4 | 1,638.0 | 1,325.1 | 1,307.9 |
| Adjustments | (0.0) | 0.0 | 0.0 | 0.0 | 0.0 |
| Cash | 2,830.6 | 2,597.4 | 1,638.0 | 1,325.1 | 1,307.9 |
Ratio
| FYE July 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| EBITDA Margins (%) | 12.4 | 8.3 | 10.4 | 10.9 | 11.3 |
| Core EPS (sen) | 12.1 | 14.8 | 17.0 | 23.4 | 28.2 |
| EPS Growth (%) | (7.1) | 22.2 | 14.9 | 37.2 | 20.8 |
| PER (x) | 41.5 | 34.0 | 29.5 | 21.5 | 17.8 |
| GDPS (sen) | 50.0 | 16.0 | 8.0 | 10.0 | 11.1 |
| Div Yield (%) | 9.9 | 3.2 | 1.6 | 2.0 | 2.2 |
| Net cash (RMmn) | (3754.2) | (5106.2) | (6065.6) | (6378.5) | (6395.8) |
| Net gearing (%) | 34.8 | 44.9 | 51.0 | 50.3 | 46.7 |
| ROE (%) | 6.9 | 7.9 | 8.6 | 11.2 | 12.6 |
| ROA (%) | 3.2 | 3.5 | 3.8 | 5.2 | 6.0 |
| NTA/share (sen) | 1.7 | 1.7 | 1.8 | 2.0 | 2.1 |
| P/NTA(x) | 3.0 | 2.9 | 2.7 | 2.6 | 2.3 |
Order book replenishment
| FYE July 31 | 2023 | 2024 | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Order book replenishment | 10,000 | 20,000 | 20,000 | 15,000 |
Recommendation Guidelines
Sector Recommendation Guideline
OVERWEIGHT: The total return of the sector, as per our coverage universe, exceeds 12%.
NEUTRAL: The total return of the sector, as per our coverage universe, is within the range of 7% to 12%.
UNDERWEIGHT: The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
BUY: Total return of the stock exceeds 12%.
HOLD: Total return of the stock is within the range of 7% to 12%.
SELL: Total return of the stock is lower than 7%.
Not Rated: The company is not under coverage. The report is for information only.
Total Return of the stock includes expected share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
ESG Scoring & Guideline
| Environmental | Social | Governance | Average | |
|---|---|---|---|---|
| Scoring | ★★★★ | ★★★★★ | ★★★★ | ★★★★ |
| Remark | Proactive in various green initiatives such as tree planting, guardianship of wetlands, food waste management and recycling events. Initiation and implementation of MRT line 1 & 2 to reduce carbon footprint. | Concerted efforts in human capital development through various initiatives such as BIM training centre, Gamuda Plant Operator School, Tunnelling Training Academy, KVMRT Safety Training Centre, and Construction Management Programme. Establish Yayasan Gamuda and set up Enabling Academy to equip young adults in autism spectrum disorder with relevant soft skills and job training. | GAMUDA-MMC signed integrity pack with MRT Corp for MRT project. Well-diversified board with >30% women directors. |
| ★★★★★ (≥80%): | Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions. | +5% premium to target price |
| ★★★★ (60-79%): | Above adequate integration of ESG factors into most aspects of operations, management and future directions. | +3% premium to target price |
| ★★★ (40-59%): | Adequate integration of ESG factors into operations, management and future directions. | No changes to target price |
| ★★ (20-39%): | Have some integration of ESG factors in operations and management but are insufficient. | -3% discount to target price |
| ★ (<20%): | Minimal or no integration of ESG factors in operations and management. | -5% discount to target price |
