Date: 27th September 2024
Broker: UOB Kay Hian

Company Overview

Gamuda is a Malaysian-based company engaged in construction, property development, infrastructure concessions, and engineering services. It is listed on the Malaysian Stock Exchange under the ticker GAM MK.

FY24 Financial Performance

For 4QFY24, Gamuda reported impressive earnings growth, although it slightly missed market expectations. The company remains on track to deliver even better growth in FY25, thanks to strong order book visibility. Despite the slight underperformance, the company’s fundamentals and future prospects remain strong, driven by ongoing projects and an expanding pipeline.

Strong Order Book

Gamuda has a solid order book that provides strong visibility into its future growth. The company’s order book is expected to support earnings growth in FY25 and beyond. As of the report date, Gamuda has secured projects that are expected to contribute to sustained revenue generation and profitability. This positions the company to capitalize on ongoing and upcoming infrastructure developments in Malaysia and the region.

Outlook for FY25

Looking ahead, Gamuda is well-positioned for stronger growth in FY25. The company’s order book remains a key driver of future performance, offering high visibility on earnings. The strong pipeline of projects and robust operational execution will help the company meet its growth targets. UOB Kay Hian maintains an optimistic outlook on Gamuda’s performance for the upcoming financial year, expecting further improvements in both revenue and profitability.

Recommendation

UOB Kay Hian maintains a “BUY” recommendation on Gamuda, with a target price of RM9.16. The positive outlook for FY25 is anchored on the company’s strong order book, its ability to secure large-scale infrastructure projects, and continued improvements in its operational performance. Gamuda’s current valuation, along with its growth prospects, makes it an attractive investment for long-term growth.

Risks

Potential risks to Gamuda’s outlook include delays in project execution, rising raw material costs, and uncertainties in the broader macroeconomic environment, which could impact its margins and profitability. However, the company’s strong order book and strategic positioning in key infrastructure projects provide a buffer against these risks.

Conclusion

Gamuda is expected to experience continued growth in FY25, driven by a strong order book and solid project execution. The company’s financial performance in FY24, despite slightly missing expectations, highlights its resilience and potential for future success. With a solid pipeline of projects and a favorable market outlook, Gamuda remains a key player in the Malaysian infrastructure sector.