Gamuda Berhad (Gamuda) registered a 4QFY23 core PATAMI of RM251.7mn, which surged by 12.7% QoQ but slipped slightly by 1.4% YoY, thanks to the acceleration in Australia and Taiwan projects. Cumulatively, FY23 core PATAMI stood at RM860.1mn, translated to 6.7% YoY increase. The results came in within our and consensus estimates, making up 111.1% and 106.3% of full year forecast respectively. Despite the absence of their toll division and the completion of the massive MRT2 project, Gamuda has achieved a remarkable feat with its construction orderbook reaching a record-breaking RM21bn, primarily fueled by its overseas operations. In parallel, property sales have soared to RM4.1bn, marking new milestones. Maintain a BUY call on Gamuda, with TP of RM5.16.

• Inline. FY23 core PATAMI of RM860.1mn was within our and market expectations, accounting for 111.1% and 106.3% of the full-year forecast, respectively.

• Dividend. No dividend declares for this quarter.

• QoQ. Revenue and PATAMI exhibited a notable uptick, registering a 65.3% and 12.7% QoQ increase, respectively. This growth attributed by the sustained momentum of their overseas project, notably the Sydney Metro West – Western Tunnelling Package (SMW-WTP), which has achieved over 50% completion. Concurrently, their Vietnam quick-turnaround projects (QTPs) have garnered substantial interest, collectively accounting for an impressive 67% of total QTP presales.

• YoY. Revenue recorded a growth of 84.2% YoY anchored by overseas construction revenue. Meanwhile, net profit dropped slightly by 1.4% from RM255.2mn to RM251.7mn upon the absent of toll division compared to the preceding year corresponding quarter.

• YTD. For the FY23, the growth in revenue, amounting to 68.0% YoY, was primarily driven by a substantial fourfold increase in overseas construction revenue, which effectively counterbalanced the slower earnings from the domestic division. Concurrently, net profit saw a 6.7% uptick, reaching RM860mn in FY23, compared to the previous year's record of RM806mn. All in all, overseas operations now constitute a significant 50% share of both the company's revenue and profit.

• Outlook. The Group's outlook appears promising, with several key targets and opportunities on the horizon, primarily centered around domestic infrastructure projects such as the Penang LRT, MRT3, and Pan Borneo. If the current momentum continues, we believe their target of new wins of the range RM20-25bn for FY24-25 is achievable. Additionally, the property segment is set to benefit from the QTPs, with the expectation of doubling revenue to be bolstered from RM6.7bn of unbilled sales.

• Forecast. No changes to our FY24F-FY25F earnings forecast.

• Maintain a BUY, TP: RM5.16. Maintain BUY call on Gamuda with SOPderived TP of RM.5.16. Overall, we like Gamuda for its: i) strong overseas presence, ii) frontrunner of MRT3, and iii) stronger earnings visibility.

Source: BIMB Securities Research - 29 Sept 2023