Gamuda

[winston]

vested

Gamuda-MMC-George Kent JV likely to win MRT3 contract

PETALING JAYA: The chances are strong for the Gamuda-MMC-George Kent joint venture (JV) to secure the Mass Rapid Transit 3’s (MRT3 or Circle Line) turnkey contract, according to CIMB Research.

The research house said this was because of the experience by this JV company from its combined underground tunnelling expertise, system works, resources, manpower and track record.

A financial newspaper reported recently that the government’s consideration was to likely award the MRT3 project to two leading contractors or a consortia.

“Based on calculations, if the MRT3 project cost is split 50:50 between the local and foreign consortia, each consortium would potentially be awarded a RM20bil to RM23bil contract,” CIMB Research said.

According to MRT Corp in the research report, the lowest bidder does not necessarily win the turnkey tender.

“The best evaluated tender must have the best overall score from a set criteria, which mostly centres on the bidders’ financial resources and technical capabilities. It also clarified that the tender award’s responsibility falls under a special committee under the federal government and MRT Corp only facilitates the tender process,” it said.

“The Circle Line’s proposed alignment will be connected/integrated with all major urban rail transport systems in the Klang Valley including the MRT1 and MRT2. This criterion, similar to other urban rail circle lines in the region, necessitates the building of the MRT3 – sooner rather than later,” it added.

MRT Corp is scheduled to launch the Circle Line’s public display on June 30, it said.

This will go on for three months, after which MRT Corp will gather the public’s feedback on the project and the alignment with eventual feedback to the changes in alignment, if needed.

MRT Corp aims for construction works to start in the third quarter of 2019, CIMB Research said.

Meanwhile, the research house said it was updated that the construction works for MRT2 were set to gain stronger momentum this year as all major civil works packages as at Oct 2017 have been awarded, implying that all above-ground works including stations works were full steam ahead in 2018.

Ten major civil works packages have been awarded, including stations and one single large scale tunnelling package, it said.

Individually, the elevated section is 20.3% completed, underground section 26%, and systems works 12%.

CIMB Research maintained its “overweight” rating for the sector with Gamuda being its top pick for rail contracts.

Source: The Star

https://www.thestar.com.my/business/bus ... Pk7MqGi.99

[winston]

not vested

2QFY18: Above expectations

Maintain BUY, with a higher TP

1HFY18 net earnings were above ours/consensus expectations.

YoY growth was supported by
i) acceleration in KVMRT 2 works and
ii) strong property sales.

We raise FY18E-FY20E earnings by 8%-9% after adjusting for higher works recognition and margins for the KVMRT 2 and Pan Borneo Sarawak Highway.

Our RNAV-based TP is raised to MYR5.80 (+4%) after rolling forward our valuation base year for LDP, KESAS and SPRINT.

Valuations are undemanding at 14x FY19 PER (-1.5 SD).

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/8 ... 78643b.pdf

[winston]

Gamuda (GAM MK)
2QFY18: Earnings Within Expectations

2QFY18 core PATMI came in at RM211m, representing 49% of our FY18 estimate.

Earnings were driven by the construction division.

Outstanding construction orderbook stood at a healthy RM6.9b.

Gamuda is well-poised to capture a portion of the RM45b MRT3 contract, while its property division promises multi-year growth driven by improving sales at its Vietnam opperations.

Maintain BUY with a target price of RM6.00, implying FY19F PE of 17.9x.

Source: UOBKH

https://research.uobkayhian.com/content ... 104a8abb78

[winston]

Shifting its focus to MRT 3 and HSR

1HFY7/18 core net profit made up 56-57% of our and consensus full-year forecasts. The results were in line as we expect weaker property earnings in 2H.

Robust 26% yoy net profit growth in 1H driven by accelerated billings for MRT 2.

Hit RM1.9bn property sales in 1H thanks to overseas ventures though lower margins.

Backing out of ECRL tenders for now due to unjustifiable margins; focusing on MRT 3, for its more lucrative margins and order book boost, and HSR PDP.

Still on track for a major rail win this year, in our view. Add retained with lower TP.


All eyes on MRT 3 and HSR awards; Add retained with lower TP

We retain FY18-20F EPS and RM4bn assumed job wins p.a. Despite the stiff competition
in the ECRL, we believe Gamuda is still on track to score a major rail win.

Target price is trimmed as we update balance sheet items (unchanged 10% RNAV discount). Maintain Add with MRT 3 and HSR wins as potential catalysts.

Downside risk is unsuccessful bids.

TP: 5.92

Source: CIMB

https://brokingrfs.cimb.com/cqosAQZsk7l ... 1tnDQ2.pdf

[winston]

Shifting its focus to MRT 3 and HSR

1HFY7/18 core net profit made up 56-57% of our and consensus full-year forecasts. The results were in line as we expect weaker property earnings in 2H.

Robust 26% yoy net profit growth in 1H driven by accelerated billings for MRT 2.

Hit RM1.9bn property sales in 1H thanks to overseas ventures though lower margins.

Backing out of ECRL tenders for now due to unjustifiable margins; focusing on MRT 3, for its more lucrative margins and order book boost, and HSR PDP.

Still on track for a major rail win this year, in our view. Add retained with lower TP.


All eyes on MRT 3 and HSR awards; Add retained with lower TP

We retain FY18-20F EPS and RM4bn assumed job wins p.a. Despite the stiff competition
in the ECRL, we believe Gamuda is still on track to score a major rail win.

Target price is trimmed as we update balance sheet items (unchanged 10% RNAV discount). Maintain Add with MRT 3 and HSR wins as potential catalysts.

Downside risk is unsuccessful bids.

TP: 5.92

Source: CIMB

https://brokingrfs.cimb.com/cqosAQZsk7l ... 1tnDQ2.pdf

[winston]

vested

HSR

The Company wishes to announce that the Consortium has on 5 April 2018 received a Letter of Intent (“LoI”) from MyHSR Corporation Sdn Bhd (Company No. 1147719-M) (“MyHSR Corp”) informing the Consortium of MyHSR Corp’s intention to award the PDP Package 1 (North) from Kuala Lumpur to the state border between Melaka and Johor (“Project”) to the Consortium.

The terms of the PDP Package 1 agreement shall be mutually agreed upon by both parties within
3 weeks from the date of the LoI, failing which MyHSR Corp shall have the right to terminate
the LoI with immediate effect.

http://www.bursamalaysia.com/market/lis ... ts/5749353

[winston]

Gamuda's SPLASH files suit against Syabas, seeks RM4.21b

KUALA LUMPUR: Gamuda Bhd's associate Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) has started legal proceedings against Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) for RM4.21bil owed.

Gamuda said on Monday its 40% owned SPLASH had served a writ together with a statement of claim on Syabas claiming the amount which was the outstanding receivables owed.

SPLASH also sought interest on the outstanding Sum of each invoice at the rate of 1% plus the base lending rate of Malayan Banking Bhd (presently at 6.90% per annum) calculated on a daily basis from the date when such invoices are due for payment until the full payment of the same.

Gamuda also said the suit would not have any significant financial and operational impact on the Gamuda group for the financial year ending July 31, 2018.

“Gamuda group will include its share of interest on the outstanding sum in its financial statements, as and when SPLASH is awarded the interest on the outstanding sum,” it said.

Source: The Star

https://www.thestar.com.my/business/bus ... E2yPm3q.99

[winston]

not vested

3QFY18: Sufficient Optimism

3QFY18 PATMI of RM201m is in line with expectations.

Earnings were driven by both the construction and property divisions.

Outstanding construction orderbook stood at a healthy RM6.4b.

The MRT2 project’s progress is gaining momentum, but we are trimming FY19-20 forecasts to reflect the cancellation of the HSR and MRT3 projects.

Maintain BUY, but we introduce a lower target price of RM4.49, implying FY19F PE of
14.1x, which does not incorporate the option values of new mega projects.

Source: UOBKH

https://research.uobkayhian.com/content ... 41a32c6633

[winston]

not vested

Another record year in the making

3QFY18 results beats expectations and is on track for another record year

Banking on PTMP commencement while awaiting revival of HSR and MRT 3

Raise earnings by 9-11%

Maintain BUY, SOP-derived TP of RM4.73

Source: DBS

https://researchwise.dbsvresearch.com/R ... VyaWRAQA==

[winston]

not vested

A step-up in MRT profits

9MFY7/18 results were above expectations; core net profit made up 82-87% of our and consensus’s full-year numbers. MRT 2 earnings were stronger than expected.

Property margin slipped due to domestic start-up costs and lower overseas margins.

Job replenishment prospects remain subdued. Our assumed zero wins for FY18-19F is unchanged. Mega rail contract risks overshadow its RM6.4bn order book.

We remain cautious on the outlook for Splash’s deal and PTMP despite market expectations that the two will be revived post GE14. Uncertainties loom in 2H18.

We raise FY7/18F EPS by 3% but retain FY7/19-20F numbers. Maintain Reduce.

Source: CIMB

https://brokingrfs.cimb.com/OgeYwEe36N- ... DfjFg2.pdf