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Re: Gamuda

PostPosted: Thu Oct 11, 2018 8:15 am
by winston
not vested

MMC Gamuda pledges “open book approach” if fresh negotiation can be held

by Izwan Idris

“It is our express hope that the government would invite us back to the negotiating table as part of that review process, and we shall adopt an open-book approach with the appointment of an international engineering consulting firm that possesses the necessary experience and track record in assessing tunnelling works around the world, and as such, be in the best position to re-examine where savings can be derived,” MMC-Gamuda said.

“Our request in return for the open-book approach is that our intellectual property rights and commercially sensitive information are duly respected as such, by the said reviewing consultant and all reviewing parties, during the review process.”

Source: The Star ... EDw3qUV.99

Re: Gamuda

PostPosted: Sat Oct 27, 2018 5:07 am
by winston
not vested

MMC-Gamuda to continue underground MRT2 with further cost cuts

KUALA LUMPUR: The Ministry of Finance (MoF) announced today that MMC-Gamuda would continue the Mass Rail Transit Sungai Buloh-Serdang-Putrajaya Line (MRT2) project, with a larger cost reduction for the underground works.

It's Minister, Lim Guan Eng said the decision was made after the final round negotiations which resulted in MMC-Gamuda agreeing to increase the cost reductions of the underground works to RM3.6 billion from RM2.13 billion.

“This means that the construction cost (excluding interest during construction, land acquisition costs and other costs) of MRT2 has been successfully reduced by RM8.82 billion or 22.4 per cent from RM39.35 billion to RM30.53 billion,” he said in a statement here, today.

MMC-Gamuda had previously agreed to cut the cost of the above-ground works by RM5.22 billion, which was accepted by the MoF.

However, its offer to reduce underground works cost by only RM2.13 billion was rejected by the MoF and decision was made for the contract to be terminated and be re-tendered.
Today, the Cabinet agreed to MMC-Gamuda's new offer and the cost rationalisation exercise.

Source: Bernama ... GAeJ4Hr.99

Re: Gamuda

PostPosted: Mon Oct 29, 2018 9:24 am
by winston
not vested

Gamuda (GAM MK)
MRT2 UG Recommencement – A Consolation Prize For Gamuda

Following the recent re-negotiations, the government has allowed the MMC-Gamuda JV to resume construction of the MRT UG section, which will lift its orderbook by RM3.2b, and earnings are expected to be enhanced by >10% p.a. in FY19-21.

Meanwhile, Gamuda will continue to be the turnkey contractor for the AG package.

To date, the JV has completed 40% and 35% of the UG and AG packages respectively.

Upgrade to HOLD. Target price: RM2.60. Entry price: RM2.30.

Source: UOBKH ... 772260444a

Re: Gamuda

PostPosted: Mon Oct 29, 2018 9:51 am
by winston
not vested

Factoring in a less negative outcome for MRT 2

MRT 2 UG scope will be cut by 38%. Renegotiation is completed.
The final outcome is less negative than our base case cut of 60%.
FY19-21F EPS up by 3.5-7.5%. Reiterate Reduce but with a higher TP

Source: CIMB ... 3FlAw2.pdf

Re: Gamuda

PostPosted: Tue Oct 30, 2018 8:54 am
by winston
not vested

MRT2 cost reduction remains negative for Gamuda

CGS-CIMB Research, which retained its “reduce” call on the counter, noted that the RM3.6bil decrease in contract price for the MRT2 underground (UG) portion was less severe than its earlier base-case assumption of a RM6bil reduction or 60% cut to contract price.

“Putting this in perspective, the actual 38% cost reduction is still more than the maximum 22% acceptable quantum proposed by MMC-Gamuda JV in the earlier negotiation rounds,” it said.

Finance Minister Lim Guan Eng said in a statement that the Cabinet had accepted an offer by MMC-Gamuda to reduce the cost of the project’s underground works by RM3.6bil, or 21.5%, to RM13.11bil.

Earlier the joint venture had offered a cost reduction of only RM2.13bil, or 12.7%, for the underground works. For the above ground (AG) portion, the 23% cost reduction remains intact.

UOB Kay Hian Research noted that the anticipated cost savings for the UG section was underpinned by reduced scope of work coupled with the removal of two stations, and that margins will be squeezed to mid-single digits of 5%-6% compared to 15% previously.

Maybank: “However, a replenishment wildcard could come from the Penang Transport Master Plan (PTMP),” it said. The research house upgraded the counter to “hold” from “sell,” but lowered its target price to RM2.70 from RM2.90 due to its discount peg on the group’s concession business.

It added that the shelving of two stations in Bandar Malaysia was insufficient to provide the RM3.6bil cost reduction and expects the remaining UG package to be completed at relatively lower margins.

Source: The Star ... aUGExVZ.99

Re: Gamuda

PostPosted: Tue Oct 30, 2018 2:50 pm
by winston
not vested

Gamuda, MMC Corp down after jointly owned unit served arbitration notice

by Surin Murugiah

Yesterday, the companies in separate filings to Bursa Malaysia said MMC-Gamuda Joint Venture Sdn Bhd (MGJV) was served an arbitration notice premised on Emrail’s alleged dispute arising out of the conditions of contract dated Dec 23, 2010 for the construction, completion, testing, commissioning and maintenance of track works for the EDTP.

Source: ... ion-notice

Re: Gamuda

PostPosted: Thu Jan 10, 2019 3:59 pm
by winston
not vested

CIMB Research raises target price for Gamuda to RM2.45

KUALA LUMPUR (Jan 10): CIMB IB Research has maintained its “reduce” rating on Gamuda Bhd at RM2.75 with a higher target price of RM2.45 (from RM2.12) and said Gamuda’s stock surged 12% yesterday.

In a note today, the research house said it views this as sentiment running ahead of two unknown outcomes, of KVDT 2 and ECRL, in 1H19.

“Re-tendering of KVDT 2 and a downsized ECRL are the sector’s only two rail jobs in 1H19.

“In our view, tenders are likely competitive and less lucrative.

“We feel that the sentiment-driven re-rating has more than priced in potential positives. Retain Reduce with a higher target price of RM2.45,” it said.


Re: Gamuda

PostPosted: Thu Jan 17, 2019 1:57 pm
by winston
not vested

What’s New

Strong share price gains YTD driven by possible revival of ECRL and new tenders for KVDT

Two-pronged strategy – bidding for smaller jobs locally and doubling efforts overseas

Approvals for PTMP around the corner

Still our top pick for the sector – BUY, TP 3.50

Source: DBS ... VyaWRAQA==

Re: Gamuda

PostPosted: Thu Feb 28, 2019 7:00 am
by winston
not vested

Value in Gamuda shares

by P. Aruna

“In our view, the sharp price decline suggests that the market might be overly pessimistic on the risk that Gamuda might be forced to sell its tollway concessions at an unfavourable price,” Credit Suisse Equity Research.said, reiterating its “outperform” stance on the counter.

PETALING JAYA: Market reaction towards news that the government has initiated talks with Gamuda Bhd on highway acquisitions has been overly pessimistic, says Credit Suisse Equity Research.

The resulting share price weakness, the research house said, has created an opportunity to accumulate Gamuda shares.

On Saturday, the government announced that it had commenced talks with Gamuda to negotiate the acquisition of concessions for four highways in which the group owns majority stakes.

The highways are theShah Alam Expressway (Kesas) and the SMART Tunnel, in which it owns 50% and 70% direct stakes, respectively; the Lebuhraya Damansara Puchong (LDP) in which it has a 43.6% stake via its 43.6% stake in Lingkaran Trans Kota Holdings Bhd (Litrak); and the Western KL Traffic Dispersal Scheme (Sprint), in which it has an effective stake of 51.8%.

On Monday, Gamuda saw its share price taking a hit, falling 18 sen or 5.92% in a knee-jerk reaction, closing at RM2.86.

Credit Suisse, in its report, said it did not see material risk of Gamuda being forced to sell its tollway concessions at an unfavourable price.

It noted three points that it believed would soothe investors’ concerns.

First, it said, the negotiations are on a “willing buyer and seller” basis, which means that there is no regulatory pressure on Gamuda to divest, unless the price is favourable.

“In order to look after the best interests of minority shareholders at Gamuda and Litrak, management will also need to ensure that the toll road concessions are sold at a fair price,” it said, comparing it to negotiations on the sale of Syarikat Pengeluar Air Sungai Selangor Sdn Bhd, whereby the management was not pressured into accepting the initial offer.

The second point, it said, was based on the fact that transaction prices for past deals had been mostly based on discounted cashflow (DCF) valuations and would likely be used as a benchmark for negotiations.

All transactions have so far been priced at over three times price-to-book value (P/BV), with the exception of the Eastern Dispersal Link which was priced at 1.1 times P/BV due to cashflow constraints.

Thirdly, it believes the highways could be a worthy investment for the government, and be able to generate reasonable returns.

“As such, we think the government can afford to offer a fair price to Gamuda for the four toll roads,” it said.

It added that by taking over the highways, the government is estimated to be able to save some RM260mil each year in compensation payments.

On valuations, Credit Suisse noted that Gamuda intended to value the highways based on existing concession terms, and not based on the proposed tolling arrangements post-acquisition.

It estimated that Gamuda’s stake in the highways is worth over RM3bil, or over RM1.20 per share, and believes that there is a “reasonable chance that it can monetise its tollway assets at a fair price”.

Source: The Star ... sjvLjbF.99

Re: Gamuda

PostPosted: Thu Mar 28, 2019 10:55 am
by winston
not vested

Gamuda (GAM MK)
2QFY19: In Line, Anticipating Weaker 2HFY19

While 1HFY19 net profit came in above expectations at 63% of full-year estimate, we expect sluggish earnings in 2HFY19, dragged by lower construction earnings (post revision of MRT2).

Gamuda believes the toll disposal will be concluded in a fair deal and acknowledges that the risk of expropriation is negligible for now, limiting the downside risk to Gamuda.

Upgrade to HOLD with target price of RM2.60 following the recent share price retracement and limited downside risk from toll disposal. Entry price: RM2.40.

Source: UOBKH ... 09cffee8fb