Friday 29 Mar 2024
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KUALA LUMPUR (Sept 30): Gamuda Bhd's share price rose as much as 15 sen or 3.9% to RM4 in Bursa Malaysia trade on Friday (Sept 30) after the builder reported on Thursday (Sept 29) that its full-year net profit from continuing operations grew to RM715.35 million from RM453.46 million a year earlier on higher revenue.

Analysts said Gamuda's full-year core profit, which excludes extraordinary items, had exceeded their expectations.

At Bursa's 12.30pm break on Friday, Gamuda's share price pared gains to RM3.92 with 8.89 million shares traded. At RM3.92, Gamuda has a market capitalisation of about RM10 billion.

Since the beginning of 2022, Gamuda's share price has risen to current levels from its closing share price of RM2.87 on Jan 3.

On Thursday, Gamuda said in a Bursa filing that its net profit from continuing operations for the financial year ended July 31, 2022 (FY22) grew to RM715.35 million or 28.36 sen a share from RM453.46 million or 18.04 sen a share a year earlier.

Gamuda said FY22 revenue from continuing operations was higher at RM4.92 billion compared with RM3.27 billion a year earlier.

On Friday, RHB Investment Bank Bhd analyst Adam Mohamed Rahim wrote in a note that Gamuda's FY22 core profit of RM832 million accounted for more than 105% of RHB's and street's full-year estimates, hence, "exceeding expectations".

TA Securities Holdings Bhd analyst Chan Mun Chun wrote in a note on Friday that Gamuda's FY22 core profit of RM800.5 million came in above expectations, accounting for 110.9% of TA's full-year estimates and 118.1% of consensus full-year estimates.

According to Adam, RHB, which maintained its "neutral" call on Gamuda shares, has however raised its target price (TP) for Gamuda shares to RM3.83 from RM3.62.

Chan said TA tweaked its TP for Gamuda to RM4.08 from RM4.32 although the analyst kept TA's "buy" rating for the shares of Gamuda, which is also a property developer and infrastructure concession owner.

According to Chan, Gamuda's management "guided that Australia is expected to be a major source of order book over the next decade".

Chan said that apart from Malaysia's Mass Rapid Transit 3 (MRT3) project, TA foresees that the Malaysian government is unlikely to launch any new mega infrastructure project in the near term due to fiscal constraints.

"Therefore, Gamuda will continue looking for oversea jobs," Chan said.

Adam said that as of July 31, Gamuda's construction order book stood at about RM14 billion.

"Potential new jobs for the company — aside from [Malaysia's] MRT3 (expected award: as early as November) — include the North-East Link highway and Suburban Rail Loop in Melbourne (Australia).

"Tenders [in Australia] are expected to be out in [the fourth quarter of calendar year 2022] with the outcome to be known in [the first half of calendar year 2023]," Adam said.

RHB however flags execution risks, as Gamuda is relatively new in Australia, according to Adam.

Edited ByChong Jin Hun
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