Latest news with #RM455.2
BusinessToday
06-05-2025
- Business
- BusinessToday
Gamuda's Trifactor Advantage In Data Centre Play
Gamuda Bhd, a key player in the Malaysian construction sector, has received positive analyst feedback following its recent land sale and enabling works contract developments. MIDF Amanah Investment Bank Bhd (MIDF Research) and CIMB Investment Bank Bhd (CIMB Securities) both maintain a BUY call on the company, with target prices of RM5.42 and RM5.26 respectively, reflecting a strong outlook for Gamuda's ongoing and upcoming projects. On May 2, 2025, Gamuda announced the sale of four plots of land, totalling 389 acres, to Pearl Computing Malaysia for RM455.2 million. This move is part of Gamuda's broader strategy in the data centre (DC) sector, which analysts see as a significant growth area. MIDF Research highlights the sale's alignment with Gamuda's differentiated data centre delivery strategy, which combines land, water, and power solutions for faster market entry. This is further bolstered by the company's Digital Industrialised Building System (IBS) capabilities. The sale was part of a broader plan that also involved securing a RM1.01 billion contract for enabling works on the land, which will support the development of a major data centre hub in Port Dickson. CIMB Securities also sees this deal positively, noting that the enabling works contract will boost Gamuda's order book by 2.8%, bringing it to RM37 billion. The contract includes earthworks, the construction of a 65 million-litre per day water treatment plant, and off-river storage facilities, with completion slated between 2025 and 2028. CIMB suggests that this contract places Gamuda in an advantageous position to bid for future DC projects, which are expected to be a significant source of revenue for the company. They estimate the potential total value of DC construction at RM14 billion to RM20 billion over time. Hong Leong Investment Bank Bhd (HLIB) echoes similar sentiments, maintaining its BUY recommendation with a target price of RM5.26. They emphasise that the enabling works contract will help bolster Gamuda's unbilled order book, supporting growth through its high-certainty pipeline of projects. The HLIB team also notes that the deal is in line with their expectations and strengthens their conviction in Gamuda's position in the data centre construction market. Analysts are particularly optimistic about Gamuda's future prospects, considering its strong order book, strategic position in the data centre sector, and ongoing expansion both locally and abroad. The company's involvement in multiple high-value projects, including the Sabah water scheme and Penang LRT, further enhances its outlook. Despite a marginal profit expected from the land sale, analysts remain confident that the enabling works contract will pave the way for even more significant data centre opportunities in the coming years. As of the latest update, Gamuda's share price stands at RM4.38, with analysts projecting a 20.1% capital upside, supported by a robust dividend yield of 2.2% and an expected total return of 22.3%. Gamuda continues to be seen as a leader in the construction sector, with a bright future ahead driven by its diversified portfolio and strong pipeline of projects. Related
New Straits Times
06-05-2025
- Business
- New Straits Times
Gamuda to record modest profit from Springhill land disposal
KUALA LUMPUR: Gamuda Bhd is projected to record a modest gain of under RM30 million from the RM455.2 million disposal of land in Springhill Industrial Park, Negeri Sembilan, according to Hong Leong Investment Bank Bhd (HLIB Research). The gain represents less than 3 per cent of Gamuda's core profit after tax and minority interest (PATAMI) of RM912 million for the financial year 2024. Despite the relatively small profit, the transaction—which reflects a 7 per cent premium over the land's purchase price in December 2024—is seen as an attractive deal for buyer Pearl Computing, considering recent data centre land transactions ranging from RM75 to RM145 per square foot. HLIB Research said the land deal comes with a major upside since Gamuda has secured an enabling works contract valued at RM1 billion as part of the arrangement, increasing its unbilled orderbook by 2.8 per cent to RM37 billion. The contract, which carries a typical pre-tax profit margin of around 8.0 per cent, involves multiple scopes of work with staggered completion dates: earthworks by Q3 2025, a 65-million-litre-per-day water treatment plant (WTP) by Q2 2027 and an onsite reservoir system (ORS) by Q4 2028. This project is a key component of Gamuda's RM35 billion pipeline of high-certainty contracts expected between February and December 2025. "We think Gamuda's differentiated DC strategy is working well, positioning it as both the critical enabling works contractor as well as land acquisition facilitator for the one gigawatt DC campus. "The company is in a strong position to undertake future DC jobs, which we had earlier estimated at RM14-20 billion at full build-out - a substantial long term stream of DC contracts. "Given that the earthworks scope is targeted for completion in Q3 2025, DC contracts look on track for this year," HLIB Research said. The firm kept its "buy" call on Gamuda with an unchanged target price of RM5.26 a share.
Malaysian Reserve
06-05-2025
- Business
- Malaysian Reserve
Gamuda retains 'Outperform' after announcing major Port Dickson land disposal
GAMUDA Bhd shares have retained its 'Outperform' call with a 52-week target price of RM4.90 at Kenanga Research after announcing that the company was disposing of a 389-acre land in Springhill, Port Dickson to Pearl Computing for RM455.2 million along with RM1 billion in enabling infrastructure works. 'We view the deal positively as it marks the beginning of a large-scale data centre development with an estimated total construction value of up to RM20 billion. 'Given Gamuda's direct involvement in the land deal and infrastructure works, we believe it is well-positioned to secure future data centre contracts,' Kenanga Research said in a note released today (May 9). It said that while the land disposal itself may not yield significant profits, it positions Gamuda to capitalise on future data centre projects on the site. The initial RM1b enabling works are set to commence soon, including earthworks scheduled for completion by 3QCY25, the construction of a 65 million litres per day water treatment plant by 2QCY27, and an off-river storage facility by 4QCY28. 'These developments aim to provide a comprehensive, ready-to-build platform for hyperscale clients, encompassing civil works, utility connections, and water infrastructure,' it said. Kenanga Research noted the following risks to our call: (i) delay in the roll-out of key public infrastructure projects in Malaysia such as the MRT3, which may delay margin recovery, (ii) rising input costs and labour shortage, (iii) risks associated with operations in overseas markets such as changes in government policies towards foreign businesses and forex, and (iv) liquidated ascertained damages (LAD) from cost overrun and delays. Gamuda shares closed RM4.38 yesterday, 6.8% down year-to-date. Its 52-week high/low was RM5.38/RM2.70. —TMR
