Gamuda's new job win forecasts at RM22-27 billion

Daily Express

2 days ago

Published on: Saturday, August 16, 2025
Published on: Sat, Aug 16, 2025 Text Size: Gamuda also anticipates securing more renewable energy and transmission projects in Australia in the near term, supported by the nation's aggressive target of achieving an 82 per cent renewable generation mix by 2030. Kuala Lumpur: Kenanga Investment Bank Bhd (Kenanga IB) has raised Gamuda Bhd's financial year 2026 (FY2026) and FY2027 new job win forecasts to RM22 billion and RM27 billion, respectively, from RM20 billion and RM25 billion previously. It attributed the additional RM2 billion per year to projects in Australia. In a note, the investment bank also said it is maintaining its FY25 new job win assumption at RM17 billion. 'With project progress expected to slow in FY2026 before accelerating in FY2027, we forecast construction revenue to remain steady at RM15 billion in FY2026, before rising to RM22 billion in FY2027 from our previous assumption of RM18 billion,' it said. Kenanga IB said there are no changes to its FY2025 and FY2026 earnings forecasts, while its FY2027 forecast has been revised upwards to RM1.95 billion from RM1.69 billion previously. The bank also highlighted that data centres remain the key driver of Malaysia's tender momentum, with results expected soon from five to seven projects, while the outcome for Pearl Computing's data centre in Springhill is anticipated in 2026. 'We expect Gamuda to likely secure at least half of these data centre projects,' it said. Meanwhile, the bank said the Ulu Padas water supply project is expected to be finalised soon, and Gamuda is actively bidding for the Penang Light Rail Transit Package 3 (turnkey system and rolling stock contracts). In addition, it expects Gamuda to secure the engineering, procurement, construction and commissioning contract for the Kerian water treatment and distribution infrastructure in the first half of 2026 (1H 2026). The group also stands a strong chance of winning another project in Taiwan. As such, Kenanga IB believes Gamuda remains on track to achieve its targeted outstanding order book of RM40–RM45 billion by end-2025. Gamuda also anticipates securing more renewable energy and transmission projects in Australia in the near term, supported by the nation's aggressive target of achieving an 82 per cent renewable generation mix by 2030. Kenanga IB said it remains confident in these ventures due to earnings visibility and the diversification of Gamuda's income streams. The bank maintained its 'outperform' call on Gamuda, with a higher target price of RM6.10. The construction sector is expected to see increased job flows in the second half of this year (2H 2025), driven by the gradual rollout of major public-sector infrastructure projects, said MBSB Investment Bank Bhd. In a note, the investment bank said earnings visibility is expected to improve in 2H 2025, supported by active industrial job flows such as the Penang light rail transit (LRT) Mutiara Line and data centre prospects, alongside the multi-year public infrastructure roadmap under the 13th Malaysia Plan (13MP). It said the Penang LRT has officially commenced following the issuance of Notice to Proceed, while land acquisitions for Mass Rapid Transit 3 (MRT3) are underway, unlocking the RM31 billion civil works portion of the project pipeline. Demand for data centres also remains structurally strong, with contractors continuing to secure hyperscale mandates as part of Southeast Asia's digital infrastructure boom, underpinned by robust leasing activity, cost competitiveness, and long-term client partnerships. 'Overall, we view this as a positive development despite the headwinds faced by the construction sector in 1H 2025, stemming from delays in project rollouts within the pipeline and global trade tensions,' it said. MBSB Investment has maintained its 'positive' stance for the sector, citing a combination of easing cost pressures, resilient private-sector demand, and improved public project execution. The bank noted that steel bar prices have continued to decline, down 9.91 per cent year-to-date and 19.5 per cent year-on-year, despite recent monthly fluctuations, while cement prices remain stable due to disciplined domestic production and raw material cost control, ensuring a favourable cost environment for contractors. 'These cost dynamics, combined with the gradual easing of labour constraints and the ability to pass through the Sales and Service Tax and tariff-related costs, continue to support profitability in ongoing projects. 'Momentum is also improving on the demand side,' it added.