It was reported that a Chinese consortium led by China Railway Construction Corp Ltd (CRCC) is in the last leg of negotiations to bag the RM8bn Gemas-Johor Bahru Electrified Double Tracking Railway (EDTR) project. A local will partner the CRCC consortium but a deal is still being ironed out. CRCC’s proposal has gained traction after offering to fund the construction of the railway. (DigitalEdge Daily)

Comments: The EDTR project was identified in the 11th Malaysia Plan 2016-2020 as a project to be implemented. The revival of the project is positive for the construction sector, improving prospects to grow their order books. We understand that Gamuda, IJM Corp and WCT were vying to be the local partners to Chinese contractors that were lobbying for the project. Gamuda and IJM Corp have the track record of undertaking works on the EDTR previously and are more likely to be chosen as local partners. We reiterate our BUY call on Gamuda, IJM Corp and WCT.

Source: Affin Hwang Capital Research - 5 Aug 2015