Latest news with #PenangLightRailTransit
New Straits Times
4 days ago
- Business
- New Straits Times
Gamuda set to exceed RM45bil orderbook target on strong domestic momentum
KUALA LUMPUR: Gamuda Bhd is set to exceed its RM40 billion to RM45 billion order book target for the year, underpinned by solid progress on domestic project wins. CGS International projects the group could close 2024 with an estimated RM42 billion in secured contracts, excluding a pipeline of high-value opportunities still in play. According to the research house, the estimate does not account for potential wins in Taiwan and Australia, nor major domestic contracts such as the Penang Light Rail Transit (LRT) system and the Inter-State Water Transfer project from Perak to Penang. Securing any of these additional projects would further boost Gamuda's order book, potentially pushing it well beyond current projections, it said in a note. "We expect one more Taiwan win by the end of the calendar year 2025. Moving into calendar year 2026, the pipeline looks promising, as it has three early contractor involvement (ECI) renewable energy projects in Australia. "It has also been shortlisted for the Parramatta Integrated Stations tender in New South Wales, the Northland Corridor highway project in New Zealand and the Sunshine Coast Railway project in Brisbane, Australia," it said. As of June 2025, Gamuda's order book stood at RM37.2 billion, with contract wins year-to-date amounting to RM18.4 billion. The firm has revised its valuation method for the group, switching from a sum-of-parts approach to a market capitalisation-to-order book ratio. It now assumes a sustainable order book of RM42.5 billion, the midpoint of Gamuda's calendar year 2025 guidance of RM40 billion to RM45 billion and has set a new target price of RM7.30, based on a 1.0 times ratio. According to the firm, Gamuda's average adjusted market cap-to-order book ratio stands at 1.2 times.
Barnama
30-07-2025
- Business
- Barnama
Penang On Strong Path To Progress, Firmly Rooted In Heritage
By Ratcharathan A/L Rawe Shanggar GEORGE TOWN, July 30 (Bernama) -- Penang is on the right track to becoming one of Malaysia's most advanced states, driven by its strengths in industry, investment and tourism, said Governor Tun Ramli Ngah Talib. In an exclusive interview with Bernama, Tun Ramli said Penang's strategic blend of modern infrastructure, rich historical heritage and cultural diversity continues to attract global investors and tourists, placing the state prominently on the Southeast Asian investment map. 'Penang has a heritage that cannot be replicated, a legacy shaped by locals and colonial influences. It's not just physical, but also traditional, which includes customs, food, and way of life, all in one rich mix,' he said. The interview was conducted recently at Seri Mutiara by Bernama editor-in-chief Arul Rajoo Durar Raj and Penang bureau chief R. Ratcharathan. Tun Ramli noted that Penang's historical role as a trading port has been bolstered by modern infrastructure such as the Penang International Airport and an efficient road network, which continue to attract steady inflows of foreign investment. In the first quarter of 2025, Penang recorded RM6.7 billion in approved investments, 90 per cent of which were foreign direct investments (FDI), accounting for 22 per cent of Malaysia's total. He said the state's economy is expected to remain robust, driven by high-tech industries such as electronics, semiconductors and artificial intelligence (AI), supported by ongoing infrastructure upgrades by the state government. Among the key federal-led mega projects seen as future catalysts are the Penang Light Rail Transit (LRT) project and the Juru–Sungai Dua Elevated Expressway, which are expected to improve connectivity significantly, ease tourist access and strengthen investment support.
New Straits Times
23-06-2025
- Business
- New Straits Times
Positive Q2 earnings seen for listed construction companies
KUALA LUMPUR: Listed construction companies may see earnings rising in the second quarter (Q2) of 2025, after posting steady growths in Q1, industry observers said. They, however, said while job fows may steadilly pick up, margins will remain under pressure in some cases. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said most companies delivered Q1 earnings that reflected stable progress on ongoing projects and effective cost management, despite a still-cautious operating environment. One of the key outperformers during the quarter was Sunway Construction Group Bhd (SunCon). The company stood out for its steady order book execution, strong project pipeline, and operational efficiency, Thong said. Looking ahead, he expects job flows to gradually pick up, supported by the rollout of major infrastructure projects such as the estimated RM17 billion Penang Light Rail Transit (LRT). However, he said the tangible impact on company earnings may only be seen further down the line. "We could see progress recognition begin in late 2025 or early 2026. Earnings from these projects will likely come through in early 2026," he told Business Times. Another industry analyst concurred that overall, most listed construction firms had met or slightly exceeded market expectations in Q1. However, he noted that margins remained under pressure in some cases due to elevated material and labour costs. "We saw that SunCon did well with solid execution and steady wins that kept them ahead. Gamuda Bhd also stood out, thanks to their overseas projects in Australia and Taiwan. "The group's geographically diversified operations are paying off, providing a buffer against the slower pace of local job flows," he noted. The analyst said the Penang LRT project provides clear visibility for the sector's medium-term pipeline, although actual disbursement and contract awards may only materialise meaningfully from late 2025. CIMB Securities Sdn Bhd said the construction sector reported another steady set of results during the recently concluded Q1 reporting season. "Among the construction stocks within our coverage, four reported results that met expectations, while IJM Corp Bhd outperformed." The firm highlighted that none of the construction companies incurred any major provisions or impairments for their projects. Overall, CIMB Securities maintained an "Overweight" call on the construction sector, and project calendar year 2025 earnings growth of 10 per cent year-on-year. On a quarter-on-quarter basis, the firm expect sector earnings growth to remain on an upward trajectory in Q2, underpinned by higher construction site activities post the festive breaks in Q1.. Likewise, it said order book visibility is improving alongside the gradual rollout of big-ticket public projects and the potential award of up to six large-scale data centre facilities worth about RM2 billion each over the next two to three quarters. The firm expects the pace of job awards in the construction industry to gather momentum ahead of the 13th Malaysia Plan, which is set to be tabled in July. Nevertheless, it said the expanded Sales and Service Tax scope could re-ignite near-term uncertainties concerning the margins of ongoing non-residential construction jobs of lower value. "We reinstate IJM Corp as one of our top large-cap construction picks alongside Gamuda. "IJM Corp is in the final stages of converting RM6 billion-RM8 billion worth of ongoing bids, and recently received the green light to proceed with the RM1.4 billion New Pantai Expressway extension," it noted. Meanwhile, CIMB Securities said Gamuda remains on track to meet its end-2025 order book target of RM40 billion-RM45 billion, supported by around RM24 billion in high-conviction tenders. These include up to six data centre-related bids, each valued at about RM2 billion. For alpha plays, the firm highlighted Malaysian Resources Corporation Bhd (MRCB), which had secured RM5.6 billion worth of new jobs year to date. It added that there is upside risk to MRCB's FY25 new order book target of RM6 billion, citing potential wins from the RM1 billion KL Sentral redevelopment and an active tender book of RM1.7 billion. As for small-cap exposure, the firm pointed to Econpile Holdings Bhd, citing its potential to benefit from a reacceleration in larger-scale piling works.
New Straits Times
19-06-2025
- Business
- New Straits Times
Malaysia construction sector set for boost before 13MP
KUALA LUMPUR: Malaysia's construction sector is expected to see an uptick in job awards ahead of the 13th Malaysia Plan (13MP), which is scheduled for tabling next month, CIMB Securities said. The firm added that the order book environment for local contractors is gradually improving as news flow on major public infrastructure projects picks up heading into the second half of this year. It noted that the focus now is on the RM17 billion Penang Light Rail Transit (LRT), the largest infrastructure project under the current administration. The system and rolling stock component, worth RM3.5 billion, received bids from several local and international companies, including Gamuda Bhd, YTL Corp Bhd, Malaysian Resources Corp Bhd and WCT Holdings Bhd. CIMB Securities said that the civil works for the Penang LRT might be reduced by between 4.0 per cent and 6.0 per cent, from RM8 billion to RM7.8 billion, after a value engineering exercise. "However, we foresee minimal downside for Gamuda as it is poised to clinch additional works worth RM3 billion under the Penang LRT, which would more than compensate for any marginal cuts to its original share of civil works worth RM5 billion," the firm said. CIMB Securities maintained its "overweight" call on the sector and projected earnings growth of 10 per cent year-on-year for 2025. On a quarterly basis, the firm expects sector earnings growth to remain on an upward trajectory in the second quarter of 2025, supported by higher construction site activities after the festive breaks in the first quarter. "Likewise, order book visibility is improving alongside the gradual rollout of big-ticket public projects and the potential award of up to six large-scale data centre facilities worth about RM2 billion each over the next two to three quarters," it added. CIMB Securities pointed out that while the new Sales and Service Tax (SST) regime is expected to have only a marginal impact on the construction industry, it could still affect low-value non-residential projects secured on thin margins. The firm estimated that about 40 per cent to 50 per cent of total project cost could be subject to SST levies. It said this could add cost pressure to low-value non-residential projects won on thin margins, especially if contractors cannot pass on the extra SST charges to financially weaker clients. It added that most basic construction materials like cement, steel, and aggregates will remain tax-exempt, as the revised SST affects only eight out of 400 building material categories. "However, we highlight that the additional SST-related levies to be imposed on steel producers may have an indirect, cascading impact on the construction supply chain, about 63 per cent of total domestic consumption, although new contract bids would be recalibrated for any subsequent hikes in steel prices," CIMB Securities said.
