Affin Hwang Capital upgrades Gamuda, raises target to RM3.70

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KUALA LUMPUR (May 9): Affin Hwang Capital Research has upgraded Gamuda Bhd to “Buy” at RM3.32 with a higher target price of RM3.70 (from RM2.70) and said the RM20 billion Klang Valley MRT Line 3 (MRT3) and RM32 billion Penang Transport Master Plan (PTMP) projects could be revived.

In a note today, the research house said it gathered that Gamuda is proposing to reduce the cost of the MRT3 by at least half from the previous estimate of RM45 billion, while the PTMP is pending approval by the federal government authorities.

“We raise our RNAV/share estimate by 7% to RM4.12 on a higher construction division valuation.

“We upgrade our call to Buy from Hold with a higher target price of RM3.70, based on a 10% discount to RNAV, as we expect Gamuda to benefit from these project revivals,” it said.