Gamuda’s full year core net profit advanced 10.6% YoY in FY23 albeit registering softer margins across its business divisions. The Group reported a new-high topline of RM8.2bn, a staggering 68% improvement YoY. Nonetheless, FY23 full year core net profit is broadly in-line with ours and street estimates, accounting for 101.5% and 101.8% respectively. We reckon that the Group’s profit margin will improve in FY24 as most projects have passed c. 40% progress mark which translates to higher billings, coupled with property sales from quick turnaround projects (QTPs) which generally, fetches better margins. All told, we have also lifted our FY24 orderbook replenishment assumption to RM13bn in view of key infrastructure project rollouts post election in Malaysia, as well as robust infrastructure projects planned in Gamuda’s key markets i.e.: Australia, Singapore and Taiwan. Hence, we raised our earnings projection by 20% on average, in FY24-26F due to higher billings and better margins assumed. Our Outperform call is retained, though with a lower SOTP-based TP of RM5.00 (previously RM5.10), pegged at 15x PER sector average due to share base dilution effect.
Source: PublicInvest Research - 29 Sept 2023
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GAMUDACreated by PublicInvest | May 03, 2024