Latest news with #RM40bil
The Star
12-06-2025
- Business
- The Star
Gamuda on track to achieve order book aim
Gamuda's current order book is estimated at RM37bil. PETALING JAYA: Gamuda Bhd 's failure to land the Suburban Rail Loop (SRL) project in Australia will not diminish its plan to have an order book of RM40bil to RM45bil by the end of its financial year ending July 31, 2025 (FY25), says CGS International (CGSI) Research. The construction and engineering giant has a tender book of RM24bil, including bids for five data centre buildings contracts, according to the research house. Gamuda's current order book is estimated at RM37bil. 'While it did not win the SRL Linewide project, of Gamuda's portion is estimated at RM10bil, we believe the company could win other projects that could replace it. 'At its March analyst briefing, Gamuda highlighted a pipeline of RM35bil jobs where SRL was one of them. 'So far it has won one project from this list, the RM1bil data centre enabling works for Pearl Computing,' the research house stated in a report following a meeting with its management. Some of the projects on bid is the Sabah water treatment plant (RM4bil worth of works), additional works for the Penang light rail transit or LRT project estmated at RM3bil, mass rail transit job in Taiwan (RM3bil), station works in Sydney/Melbourne (RM6bil) and early contractor involvement for renewable energy in Australia worth some RM2bil. Gamuda is due to file its third quarter (3Q25) results on June 26, and CGSI Research expects an improvement in net profit year-on-year (y-o-y) and sequentially, with a meaningful pick-up to come in FY26 when its local construction projects and Vietnam property project gradually move away from the shallow part of the S-curve recognition. CGSI Research said Gamuda is, however, unlikely to meet its RM6bil property pre-sales target for FY25 as approvals for its Hanoi project (Gamuda City) have been slow. 'As Gamuda has pencilled in RM840mil pre-sales for this project for FY25, we believe FY25 group pre-sales will likely come in flat year-on-year (y-o-y) at RM5bil. 'Another concern for investors regarding its exposure to the Vietnam property market, where it has eight projects with a gross development value (GDV) of RM18bil (29% of total GDV as of Jan 25), is US import tariffs, which could disrupt foreign investment and sentiment,' CGSI Research added. The research house viewed Gamuda's exposure to Vietnam as heavy on its residential quick turnaround projects located in prime locations. 'The litmus test is the launch of the third phase of Eaton Park, which we expect to take place in June. 'The maiden launch in May 2024 was fully sold in two hours, leading to a second launch in December 2024, which had since been fully sold as well,' CGSI Research noted. It has retained its 'add' call on Gamuda with a target price of RM6 a share despite trimming its earnings projections on the company. CGSI Research cut its FY25 to FY27 earnings per share forecast for Gamuda by 11%, 7% and 2% for FY25, FY26 and FY27 respectively, driven by expectations of slower progress for some construction projects, such as Silicon Island reclamation works (six months behind schedule) and the Penang LRT. There was also a delay in contract awards of projects including the Sabah Water Treatment plant as well as data centre projects. 'Nevertheless, we think FY27 earnings should still double from FY24, implying three-year compounded annual growth rate of 24%,' it said.
The Star
06-05-2025
- Business
- The Star
Gamuda strengthens position in DC landscape
Kenanga Research saw potential for Gamuda to secure significant DC projects. PETALING JAYA: Gamuda Bhd is well poised to strengthen its position as a one-stop data centre (DC) infrastructure provider in Malaysia, say analysts. The group has announced the disposal of a 389.7-acre freehold land in Negri Sembilan to Pearl Computing Sdn Bhd (PCSB) for RM455.2mil in cash. Simultaneously, its subsidiary, Gamuda DC Infrastructure Sdn Bhd, has secured a external infrastructure contract worth RM1bil from PCSB. TA Research has viewed the latest developments as exemplifying Gamuda's strength in offering end-to-end 'land+utility+water' packages for DC-related projects. 'With the disposal expected to conclude by end-2025, we estimate a modest gain of RM30.8mil, before accounting for holding and ancillary costs. 'The RM1bil enabling works contract could also boost Gamuda's year to date job wins to RM26.2bil since financial year 2024 (FY24), raising its total outstanding order book to about RM37bil – equivalent to 3.5 times FY24 construction revenue,' said the research house. Based on Gamuda's management guided pre-tax profit margin of around 8%, TA Research noted the contract is anticipated to contribute RM60.8mil in net profit over the construction period. It remained upbeat on Gamuda's DC job prospects given its management which expressed high confidence in securing at least three new projects from two local developers by year-end. Including other imminent contract win namely the Australian Suburban Rail Loop, Sabah Upper Padas water treatment plant, and additional Taiwan Xizhi Donghu MRT packages totalling RM17bil, TA Research believed the management's internal goal of achieving an unbilled order book of RM40bil to RM45bil is within reach. It has maintained a 'buy' call on the stock with a target price (TP) of RM5.88 per share. Kenanga Research, in a note to clients, also saw potential for Gamuda to secure significant DC projects. It noted the 389-acre land has the capacity to support DC developments of 800MW to 1,000MW. With estimated construction costs of RM18mil to RM20mil per MW, the total potential contract value for this development could be RM14bil to RM20bil, said Kenanga Research. Assuming Gamuda secured half of the contracts over a two-year period, the annual data centre job wins could be RM3.5bil to RM5bil. 'This will surpass our current annual assumption of RM3bil. For every additional RM1bil in DC contracts secured beyond our RM3bil assumption, we estimate a 2.2% increase in FY26 earnings forecast and a seven sen rise in the TP from RM4.90,' added the research house. CGS International Research (CGSI Research) highlighted Gamuda's targeted order book of RM40bil to RM45bil by end of 2025. 'If all of the projects come to fruition and assuming a burn rate of RM1bil per month, Gamuda may end up with an order book of RM59bil by end-2025. Our FY25 and FY26 new order win assumptions are more conservative at RM8bil and RM20bil respectively,' it added. CGSI Research, which liked Gamuda for its diversified order book and growing property business, had reiterated an 'add' call on stock with a TP of RM6. MIDF Research described Gamuda's freehold land sale and the award of a RM1bil enabling works contract as a positive development, which is in line with the group's latest strategy of a differentiated DC delivery. 'Gamuda remains our favourite in the construction sector, backed by its successful overseas expansion plan, consistency in clinching sizeable jobs and being a front runner for most mega projects in Malaysia,' it added, reiterating a 'buy' call on Gamuda with a TP of RM5.42. The counter closed three sen down to RM4.35 yesterday.
The Star
01-05-2025
- Business
- The Star
Azam: Deferred prosecution will be used in high-profile cases
MACC chief commissioner Tan Sri Azam Baki speaking to the media during the MACC's Executive Talk session in Putrajaya yesterday. PUTRAJAYA: Graft busters are pushing for the Deferred Prosecution Agreement (DPA) to be introduced as soon as possible to boost the fight against corruption and recovery of assets in high-profile cases. Malaysian Anti-Corruption Commission (MACC) chief commissioner Tan Sri Azam Baki (pic)said the Special Cabinet Committee on National Governance, chaired by Prime Minister Datuk Seri Anwar Ibrahim, is expected to meet in June to discuss the matter. 'We hope it will be introduced as the focus of the DPA is on the recovery of assets. 'The DPA has been used in countries such as the United States and the United Kingdom,' he said during the MACC's Executive Talk with the media. Azam said the DPA will be used in cases involving grand corruption and corporate liabilities involving large amounts of funds. 'We will use it for high profile cases involving large amounts. 'For example, an accused in a grand corruption case involving RM177mil in funds. The DPA will be used to seize the funds so that it goes back to the government's coffers,' he added. The MACC has proposed that cases where DPA will be used must have justification to do so. 'We also proposed that when the DPA is to be used in certain cases, it must have the consensus of the deputy public prosecutor, who will review the justification for DPA to be used. 'We will definitely not use it for small-scale cases,' he said. Azam said he expects the proposed amendment to the MACC Act 2009, which will include the DPA mechanism, to be introduced in Parliament by the second quarter of next year. 'We hope it will be eventually passed and enforced,' he added. Azam has been proposing the DPA for some time, arguing that it will allow prosecutors to achieve outcomes more efficiently without lengthy and costly trials, and that it will help fight economic and financial crimes. It will also ensure faster recovery of assets and funds and better compliance by persons or entities to prevent future violations. On another matter, Azam said it is getting harder for authorities to detect transactions of illicit funds, as criminal entities are resorting to e-wallet platforms and cryptocurrencies. 'If they (criminal entities) use the usual bank transactions, we will be able to track them eventually. 'However, they are using these new transaction mechanisms. Some are also using money changers to transfer ill-gotten funds as well,' he added. Azam believes illicit funds from overseas that have flowed through Malaysia total about RM40bil. 'These illicit funds are derived from various criminal activities, including drug trafficking, smuggling and fraud. 'If we can recover at least RM10bil, it will benefit the country, but it requires efforts between law enforcement agencies and other government bodies,' he added. One of the best examples of repatriation of overseas assets and funds is the 1Malaysia Development Bhd case. 'We had good and lengthy discussions with international authorities that enabled us to repatriate funds and assets belonging to the country.'
The Star
24-04-2025
- Business
- The Star
HR Minister urges semiconductor industry to re-imagine Penang's future
GEORGE TOWN: Industry leaders should turn uncertainty into opportunity and accelerate Malaysia's transition into a high-value economy driven by innovation, says Steven Sim. "They should boldly re-imagine Penang's future, one that shifts the state's economic force from Made in Malaysia to Made by Penang/Malaysia, transforming it from an outsourced manufacturing hub into an innovation-driven economy," said the Human Resources Minister. He was speaking at two industrial dialogues organised by InvestPenang over the weekend jointly with Deputy Investment, Trade and Industry Minister Liew Chin Tong and Invest Penang chief executive officer Datuk Loo Lee Lian. The event gathered over 30 key stakeholders from Penang's semiconductor and advanced technology sectors, including those from multinational corporations and local small and medium enterprises. Sim said nurturing local talent, developing homegrown technology and attracting strategic investments would empower Penang-based companies to not only serve global supply chains through manufacturing but innovate and design proprietary technologies backed by local expertise. In a statement, Sim said more than RM40bil in financing and guarantees have been mobilised to empower micro, small and medium enterprises (MSMEs), the backbone of local industry and job creation. "At the same time, government-linked investment companies will channel more than RM100bil domestically under the five-year (2024-2028) GEAR-uP programme to spur long-term growth. "To reinforce household spending power, the government has approved civil service pay hikes and raised the private sector minimum wage, ensuring an additional RM20bil in extra income being spent in the economy. As the Asean chair, Sim stated that Malaysia is leading efforts to strengthen the grouping's role as a cohesive regional economic bloc, where a recent joint statement by ASEAN economic ministers reaffirmed the region's united stance in navigating global economic challenges and external market volatility.
