Broker: UOB Kay Hian
Date of Report: 30 June 2025

Gamuda Berhad 3QFY25 Results: Riding High on Robust Orderbook and Margin Expansion

Overview: Gamuda Maintains Strong Momentum with Promising Outlook

Gamuda Berhad (GAM MK), a leading civil engineering and construction company with diversified interests in property development and water concessions, continues to impress with its latest 3QFY25 results. Supported by a balanced mix of domestic engineering projects and strategic property development initiatives, Gamuda is poised for a record-breaking performance in the upcoming financial years.

• Current Share Price: RM4.65
• Target Price: RM5.55
• Upside Potential: +19.4%
• Market Cap: RM26.8 billion (USD 6.34 billion)
• 52-week High/Low: RM5.38 / RM3.28
• Major Shareholders: Employees Provident Fund Board (14.4%), Amanah Saham Nasional Bhd (4.1%), Generasi Setia M Sdn Bhd (4.0%)

3QFY25 Performance: Surpassing Expectations with Margin Expansion

Gamuda delivered robust earnings in 3QFY25, underpinned by a stronger domestic project mix and progress billings in its construction segment. The company reported:

• EBIT Margin: 8.5%
• Core PATAMI Margin: 8.0%

Earnings were within expectations, with 9MFY25 core net profit at 65% of full-year estimates. The fourth quarter is anticipated to be the strongest, potentially pushing FY25 net profit to RM977m–997m.

Dividend Payout: Higher Interim Dividend Declared

Gamuda declared a higher interim dividend per share (DPS) of 5 sen in 3QFY25, bringing the 9MFY25 DPS to 10 sen, up from 8 sen in the previous year. This implies a 2.2% yield and a 43% payout ratio.

Construction Segment: Domestic Contracts Drive Margins

Gamuda’s construction and engineering division posted an EBIT of RM560m (+5% QoQ, +60% YoY) on revenue of RM2.5b. Key highlights include:

• Revenue decline attributed to early-stage local projects and a temporary pause in the Sydney Metro West project (resumed in June).
• Shift towards higher-margin domestic contracts lifted EBIT margin to 6.6% (+1.1ppt QoQ).

Property Segment: Sequential Dip, but Strong Outlook for 4QFY25

The property segment reported a weaker quarter due to the absence of lumpy contributions from Singapore’s OLA Residences and Celadon City projects. Despite this, revenue and net profit would have grown 31% and 148% respectively, excluding OLA Residences, on the back of higher contributions from Vietnam’s quick turnaround projects (QTP).

Financial Forecasts: Multi-Year Growth Trajectory

Gamuda’s financials point to a compelling growth narrative:

Strong Orderbook and Project Pipeline: Poised for Record Years

Gamuda’s outstanding orderbook stands at RM34.6 billion, with management guiding towards RM40–45 billion by end-2025. The company needs to secure RM11–12 billion of new contracts to meet this target, and its pipeline is robust:

• Data Centre Projects: Gamuda is bidding for projects with a total value of RM10–14 billion, with 15–20 DC projects (worth >RM30 billion) available for tender over the next two years.
• Domestic Infrastructure: Finalisation of projects like the Upper Padas Hydroelectric Dam and Penang LRT packages is imminent. Industrialised building system capacity can support eight DCs concurrently.
• Australia: The company is pivoting into renewables, targeting A\$25 billion in tender value over the next two years. Gamuda is on the final shortlist for major projects such as the Sunshine Coast Railway in Brisbane and the Northland Corridor highway in New Zealand.
• Taiwan: Recently secured the Xizhi Donghu MRT project (NT\$31.9b/RM4.3b), with additional works worth NT\$60b/RM8.1b expected to be awarded to Gamuda’s JV within three years.

Orderbook Breakdown by Geography and Segment

Segmental Forecasts and SOTP Valuation

Gamuda’s SOTP valuation underpins the RM5.55 target price, based on a 25x FY26 PE for construction, a 10% discount to RNAV for the property division, and inclusion of water concessions, less net debt.

ESG Commitments: Strong Environmental, Social, and Governance Credentials

Gamuda continues to strengthen its ESG profile across all dimensions:

• Environmental: Targets a reduction in greenhouse gas emission intensity by 30% by 2025 and 45% by 2030.
• Social: Maintains a well-diversified workforce (43% female, 57% male).
• Governance: 57% of the board comprises independent directors.

Key Financial Metrics at a Glance

Conclusion: Gamuda – A Sector Standout with Multi-Year Upside

Gamuda remains the top pick in the construction and infrastructure sector, offering strong mid- to long-term capital upside. Its multi-year record-high orderbook, robust earnings visibility, and potential for valuation rerating following KLCI inclusion position the group for continued outperformance. With visionary strategies and a clear focus on high-value segments such as data centres and renewables, Gamuda is set to deliver record earnings in FY26–27 and beyond.

Recommendation: BUY (Target Price: RM5.55)

Gamuda continues to offer a compelling investment proposition for investors seeking exposure to Malaysia’s infrastructure and property growth story, backed by strong fundamentals, orderbook visibility, and ESG excellence.