Gamuda (BUY)

• In MRT Corp's press release yesterday, MMC-Gamuda JV (50:50 stake) hasbeen awarded the 9.5km underground tunnelling works and seven undergroundstations for the Sungai Buloh-Kajang MRT line for RM8.2bn.
• Replenishment success' With thelatest award, Gamuda has successfully replenished its outstanding order book byan additional RM4.1bn (after adjusting for its 50% stake), bringing its totaloutstanding order book to ~RM6.1bn, translating to 3.3x FY11's constructionorder book and has removed lingering concern on the company's dwindling orderbook.
• 15.9 sen/share' By assuming a PATmargin of 8%, the tunnelling contract is worth ~15.9 sen/share for Gamuda.
• Earlier than expected' We are encouragedby the increasing momentum in which MRT Corp has been expediting the contractawards.
• Circle line next' By securing thistunnelling contract, we believe that MMC-Gamuda JV now stands a higher chancein securing additional tunnelling works for the next MRT line which is known asthe Circle line.
• Maintain BUY as Gamuda has successfully secured both MRT tunnellingcontract and the PDP role. Potential catalyst for Gemas-Johor EDTP project.