WITH the environment, social and corporate governance (ESG) agenda becoming an increasing sticky point among foreign funds – not to mention local institutional investors – it is imperative for listed companies to start playing their cards right from the outset.
It is therefore praiseworthy for leading engineering, infrastructure and property group Gamuda Bhd to push towards fulfilling its ESG responsibility beyond mere compliance.
In fact, being at the forefront of managing its ESG risks will lend support in its future tender of major engineering and infrastructure projects in Malaysia and overseas, according to Maybank IB Research.
“Gamuda is realigning its corporate decisions towards its long-term goals on greenhouse gas (GHG) emissions; it is finalising plans to lower total GHG emissions toward low carbon by 2030 and carbon neutral by 2040 across all its ops,” revealed head of research Wong Chew Hann in a company update.
“In biodiversity conservation, Gamuda Parks was set up in 2018 to formalise the group’s efforts in this respect (in its property projects).”
To enhance governance further, its integrity and governance unit (IGU) acts as the secretariat as the group develops its three-year organisational anti-corruption plan for implementation in early-2021.
With regard to efforts to mitigate the COVID-19 infection risk among its workforce, Gamuda has re-activated two centralised labour quarters (CLQ) – thus bringing the total to four – by setting up centralised quarantine quarters (CQQ) at every CLQ in addition to setting up a RT-PCR (reverse transcription polymerase chain reaction) testing laboratory (capacity for 4,000 samples per day).
Elsewhere, Gamuda has established a plant operator school, tunnelling training academy and building information modelling (BIM) academy to train not just its employees but workers that of its subcontractors as well.
“Its engineering & construction and property divisions remain in operation during the current movement control order (MCO 2.0) period under stricter SOPs,” observed Maybank IB Research.
“We expect their work pace to be slightly impacted compared to pre-MCO 2.0 period due to stricter SOP (standard operating procedure) compliance.”
Earnings-wise, the research house expects Gamuda’s tolled highways to be the most impacted given traffic fell by circa 90% during the first month of MCO 1.0 (March-April 2020).
“Our FY 2021E have imputed for still slow activities; we maintain our forecasts for now (maintained “buy” with an unchanged target price of RM4.22).
At 11.33am, Gamuda was up 1 sen or 0.28% at RM3.64 with 364,600 shares traded, thus valuing the company at RM9.15 bil. – Jan 14, 2020