Gamuda

[winston]

vested

Budget 2020: Cabinet OKs MoF plan to take over four highways

KUALA LUMPUR: The government is going ahead with the plan to acquire four highways from GAMUDA BHD

The takeover, first announced by the Finance Ministry in June, has been approved by the Cabinet, Lim Guan Eng said in Budget 2020 speech today.

Under the plan, the government will pay RM6.2bil to acquire Shah Alam Expressway (KESAS), Damansara-Puchong Expressway (LDP), Sprint Expressway (SPRINT) and SMART Tunnel (SMART).

Gamuda is a substantial shareholder in all four highways.

The takeover will be funded via government-guaranteed borrowings.

"With the introduction of congestion charges that will be lowered by up to 30% of the present toll rates during near peak and normal hours and free during off-peak hours, this will provide a savings to the highway users nearly RM180mil a year, or RM2bil over the respective concession periods," Lim said.

There will be no extension of the existing concessions.

"The acquisition of these highways will not burden the government because the financing, operations and maintenance cost, will be entirely funded by the collection of toll and congestion charges without requiring any future funding by the government," Lim said.

Source: The Star

https://www.thestar.com.my/business/bus ... xa3EU82.99

[winston]

not vested

Gamuda Berhad (GAM MK)
All At Once

Gamuda has recently made its foray into Australia via a 50%-stake acquisition in Martinus Rail, where Martinus wishes to tender for rail infrastructure projects (up to A$8b) for infrastructure development.

Meanwhile, the Cabinet has approved the takeover of Gamuda’s tolled highways and an official announcement will be made soon.

Separately, the part of proceeds from the disposal of its tolled highways will be channelled as initial funding and will be used to kick-start the ambitious PTMP.

Maintain HOLD and target price of RM3.65. Entry price: RM3.50.

Source: UOBKH

https://research.uobkayhian.com/content ... 9c8a0f7673

[winston]

not vested

Gamuda Bhd
Price: RM3.90

Given its strong track record in executing mega infrastructure projects, Gamuda is arguably the best proxy to large construction jobs in Malaysia.

Some of the mega projects which were shelved immediately post the 14th general election, have been revived including Bandar Malaysia and the East Coast Rail Link.

There have been reports that the government is reviewing the MRT 3 and the High Speed Rail projects.

If the two mega infrastructure jobs were revived, we see Gamuda as a potential beneficiary.

Gamuda has submitted alternative proposals for the MRT3 to reduce the burden on the government’s finances.

MRT3 is an essential part of the Greater Kuala Lumpur Integrated Rail System to achieve public modal share target of 40% in urban areas by 2030.

There are also other opportunities for Gamuda including the Penang Transport Master Plan (PTMP). Gamuda has already received the letter of award for the PTMP from the Penang state government.

Besides Malaysia, Gamuda is looking for opportunities offshore. It has recently acquired a 50% stake in Australian-based Martinus Rail, Australia’s largest independent specialist rail constructor.

This acquisition will fast-track its expansion into the Australian infrastructure market, especially the Australian railway market which is estimated to offer about A$20bil of projects.

Gamuda’s proposed divestment of four highways to the Finance Ministry would result in the group receiving RM2.36bil in net proceeds, if the plan materialises.

The proceeds are expected to be used to fund future projects and reward shareholders with a special dividend.

Gamuda continues to enjoy cashflows from its highway concessions.

Based on consensus estimates, Gamuda currently trades at a price earnings ratio (PER) of 12.5x in FY20, which is at a discount to the market, while dividend yield is 3.9%.

Source: UOB

[winston]

not vested

Gamuda (GAM MK)
4QFY21: Projects Rollout Timeline Remains Uncertain

Gamuda’s 4QFY21 core net profit of RM214m (+51% qoq, +58% yoy) was above our and
consensus’ expectations, due to lumpy recognition from Celadon City project and
MRT2 Phase 1 completion.

Earnings are expected to normalise in the upcoming quarter.

The company is in need of new jobs with the MRT2 project nearing completion.

Winning the Australian jobs and the rollout of the MRT3 project will bode well for the
company.

Maintain HOLD with revised target price of RM3.50.

Source: UOBKH

https://research.uobkayhian.com/content ... 94da7cc74d

[winston]

not vested

Gamuda
Strong FY21 but delayed MRT 3 catalysts

FY21 results beat expectations with 12% yoy growth in core net profit. Tailend profits for MRT 2 (phase 1) and Celadon City were key drivers.

MRT 3 remains on the cards and could re-emerge as a key catalyst in Budget
2022; the PSI project is facing delays. Add retained with a lower TP.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 79EE5FF119

[winston]

Revving for more; maintain BUY

Gamuda’s recent MYR6.5b win in Australia reaffirms its capability, as it continues to target an even larger E&C orderbook size - MYR20b by mid2023.

Higher pre-sales can also be expected of its property projects as it embeds sustainability into both design and concept.

A highway trust for its four tolled urban highways, if material k value.

We raise earnings forecasts to incorporate its recent E&C wins.

Our new RNAV-TP is MYR4.28 (+28sen).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/255780.pdf

[winston]

not vested

A winning resolution; maintain BUY

Gamuda’s proposal for a SMART 2 flood mitigation system in western Klang Valley (downstream of the Klang River), if it materialises, should provide a winning resolution to the government and population there.

For Gamuda, this project would further uplift its E&C profile, and bring it closer to its MYR20b orderbook target (MYR10.4b now) by mid-2023 (endFY23).

Our earnings forecasts have upside potential, depending on the project value and timeline. No change to our MYR4.28 RNAV-TP.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/256064.pdf

[winston]

Gamuda (GAM MK)
2QFY22: Above Expectations, Expecting Stronger 2HFY22

Gamuda reported a core net profit of RM177.1m (+16.2% qoq, +43.9% yoy) for 2QFY22.

We deem this above expectations in anticipation of a stronger 2HFY22 on the back of
an economic recovery.

Gamuda is among the key frontrunners for the upcoming biddings for mega projects like MRT3, given its strong track record.

Its recent job wins in Australia and Singapore also bode well for its regional prospect as they triple its orderbook to RM10.4b.

Maintain BUY with a higher target price of RM3.81.

Source: UOBKH

https://research.uobkayhian.com/content ... 0dce4ab170

[winston]

vested

Robust performance in 1HFY22

1HFY22 results were in line; core net profit surged 39.5% yoy on higher construction and property development margins.

Target of doubling RM10.4bn order book remains intact, driven by MRT 3.

Reiterate Add rating with a higher RM4.25 TP (10% RNAV discount).

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... CDD5BC86E5

[winston]

Gamuda (GAM MK)
On Track For Recovery Riding On Post-Pandemic Era

Gamuda is well poised to benefit from the upcoming mega projects rollout such as
MRT3, given its strong track record.

We came away from Gamuda’s session in our Malaysia Corporate Day E-Conference feeling optimistic of its prospects.

Its recent job wins in Taiwan, Australia and Singapore bode well for its regional prospects as it triples its orderbook to RM10.6b.

In addition, the disposal of its highway concessions will strengthen its war chest for future growth. Maintain BUY. Target price: RM3.81.

Source: UOBKH

https://research.uobkayhian.com/content ... 9563c94f4c