Date of Report
September 30, 2024

Broker Name
CGS International Securities

Company Overview
Gamuda Berhad is a Malaysian engineering, property, and infrastructure company with a strong presence in large-scale projects. The company is known for its expertise in tunneling, road works, and other infrastructure developments, with a growing portfolio of international projects.

Wind Farm Project in Australia
Gamuda recently secured a significant win with the DTI (Department of Transport and Infrastructure) for a wind farm project in Australia. This project, valued at approximately RM702 million, marks a key diversification move for the company as it expands beyond its core rail-based projects in New South Wales (NSW).

The wind farm project helps Gamuda move closer to achieving its target of RM30 billion to RM35 billion in orderbook by the end of CY24F (Calendar Year 2024 Forecast). The company has a longer-term goal of reaching an orderbook of RM40 billion to RM45 billion by the end of CY25F.

Positive Implications of the Project
This new contract is considered a positive development for Gamuda as it continues to diversify its project portfolio, moving into renewable energy infrastructure. The successful execution of this project could significantly bolster Gamuda’s orderbook and help the company achieve its ambitious growth targets.

The contract win is also notable as it allows Gamuda to reduce its reliance on rail projects in NSW, further enhancing its strategic positioning in the Australian infrastructure market.

Investment Insights
CGS International Securities maintains an “Add” recommendation for Gamuda, indicating that the stock’s total return is expected to exceed 10% over the next 12 months. The stock’s target price (TP) is RM9.50, based on a sum-of-parts (SOP) valuation derived from the company’s growing project pipeline and strong financial outlook.

Orderbook Growth Targets

• End-CY24F Target: RM30 billion to RM35 billion
• End-CY25F Target: RM40 billion to RM45 billion
• Current New Wins Target: RM35 billion

Conclusion
Gamuda’s latest contract win in the Australian wind farm sector highlights its ability to diversify and grow internationally. The project supports the company’s long-term orderbook expansion goals and reinforces its reputation as a key player in large-scale infrastructure development. With a positive outlook and a robust pipeline of projects, Gamuda remains well-positioned for future growth.