Gamuda's wholly owned subsidiary in Australia, DT Infrastructure Pty Ltd (DTI), has secured a contract to deliver the construction works for the Goulburn River Solar Farm Project, valued at AUD625m (approx. RM1.8bn), from Lightsource bp Renewable Energy Investments Ltd (Lightsource bp). With this new contract win, we estimate that the Group's outstanding orderbook is now at RM31.8bn, which represents about 11.3% of our FY25F orderbook replenishment target. The project is expected to contribute approximately 1.3% per annum, on average, to the Group's earnings over the 24-month contract period. While we view the contract win positively, we maintain our forecasts as we have already incorporated this in part of our FY25 orderbook replenishment assumption of RM16bn. We retain our Outperform rating on Gamuda, with an unchanged SOTP-based TP of RM10.40.

• Lightsource bp is a prominent global player in the development and management of solar energy projects, dedicated to providing affordable and sustainable solar power to businesses and communities in Australia and worldwide. Established in 2017 as a 50:50 joint venture (JV) with BP plc, it is now wholly owned by BP plc. Its portfolio features major projects such as Lower Wonga Solar (350 MWdc), West Wualong Solar (107 MWdc), Wunghnu Solar (90 MWdc) and Sandy Creek Solar (840 MWdc).
• Project details. The Goulburn River Solar Farm project, awarded to DTI by the Goulburn River Fund Pty Ltd, trustee for the Goulburn River Trust, a special purpose vehicle and wholly owned subsidiary of Lightsource bp. Situated in the Upper Hunter Region of New South Wales, the project will produce renewable energy sufficient to power around 225,000 homes, while also contributing to a reduction in carbon emissions by 910,000 tonnes annually.
• Scope of works. DTI has secured the engineering, procurement, and construction (EPC) contract, encompassing the civil, structural and electrical infrastructure for the 585MW solar farm. Construction work is slated to begin on 1 Jan 2025, with completion expected in 24 months.
• Outstanding orderbook at RM31.8bn. Following this contract win, the Group's outstanding order book has increased by 6.0%, reaching RM31.8bn. Assuming mid-single digit margins and a corporate tax rate of 30% in Australia, we estimate that this project will contribute around 1.3% in net profit per annum, on average, to the Group's earnings during the 24-month contract period. That said, we make no adjustment to our earnings estimates, as this project is already accounted for within our FY25F order book replenishment target of RM16bn.

Source: PublicInvest Research - 17 Dec 2024