AllianceDBS Research has today placed a buy call on Gamuda and upgraded its target price to RM4.60 from RM4.30 previously as Gamuda is poised to gain from mega projects locally and abroad.
The research house said it expected Gamuda to clinch RM3 bil blanket new wins in the immediate term which may include Mass Rapid Transit Line 3 (MRT 3), Australia projects and/or Penang Transport Master Plan. The collective value of all three projects is RM61 bil and Gamuda should be able to clinch a decent portion.
According to AllianceDBS, the most important catalyst for Gamuda was the signal from the government to pump-prime the economy.
The government’s upcoming medium-term recovery plan in October may serve as a prelude to the potential approval of funding for projects in the Budget 2021 tabling in November and 12th Malaysia Plan (12MP) which include the high-Speed Rail (HSR) and Mass Rapid Transit Line 3 (MRT 3). Gamuda is seen to have an upper hand in these projects given its strong reputation.
Meanwhile, Gamuda has been making good headway in Australia where it has been shortlisted for two sizeable projects. It has a 67% probability of winning one metro project and 33% probability of winning a motorway project, the research house noted.
As at 12.29pm today, Gamuda Bhd share price stood at RM3.38 with a market capital of RM8.5 bil. – Sept 4, 2020
