GAMUDA: Orderbook Jumps Following Major Infrastructure Contract Win
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A prominent construction and infrastructure group has significantly bolstered its orderbook following a major road upgrade contract win in Australia. According to a research report by TA SECURITIES, the joint venture involving the group and DT Infrastructure (DTI) was awarded the Richmond Road Upgrade contract by Transport for NSW, valued at AUD170 million (approximately RM469 million). This latest achievement has elevated the group’s outstanding orderbook to an estimated RM39.3 billion, reinforcing its sustained growth trajectory.
Project Details
The Richmond Road Upgrade project entails comprehensive civil, engineering, and design services. Key features include widening the existing road with additional lanes in each direction, constructing a new flyover bridge, and relocating/renewing pedestrian and cycle access with new infrastructure. The project also involves upgrading three major intersections. Richmond Road serves as a critical arterial link for commuters and freight between Blacktown and Windsor, experiencing heavy congestion with over 89,000 vehicles daily. The upgrade, proposed between the M7 Motorway and Townson Road in Marsden Park, is jointly funded by the Australian and NSW Governments and is a crucial component of the North West Growth Centre Road Network Strategy. Construction is set to commence in early 2026 and is targeted for completion by 2027.
Future Outlook and Recommendation
The substantial increase in the orderbook to RM39.3 billion provides robust earnings visibility for the next 2-3 years. TA SECURITIES projects this new contract could contribute approximately 0.4% per annum on average to the group’s earnings from FY26 to FY28F, assuming a mid-single-digit margin. While viewing the award positively, TA SECURITIES notes that the impact was partly anticipated and incorporated into their FY26 orderbook replenishment assumptions. The investment bank maintains its “Outperform” call on the group, affirming its positive long-term view.
