KUALA LUMPUR: Gamuda Bhd has an ambitious strategy to double its revenue to RM30 billion from financial year 2024 (FY24) levels, aiming for a compounded annual growth rate (CAGR) of 20 per cent, CIMB Securities said.

This will be driven by an expected two-fold increase in revenue for both Gamuda Engineering and Gamuda Land.

"The construction business is set to benefit from a strong pipeline of projects in Australia, bolstered by successful ventures into new market segments, such as DT Infrastructure Pty Ltd signalling project in Perth," the firm said.

According to the bank-backed research firm, Gamuda is also targeting to increase its outstanding orderbook to over RM30 billion by the end of the year to support its growth objectives.

"To reach this goal, the group plans to secure several domestic and international contracts with attractive margins, most of which are expected to be awarded within the next three months.

"These contracts include the Penang LRT (with the tender submission due next month), the Upper Padas Hydroelectric Dam (awaiting final approval, possibly including a water supply scheme), Pan Borneo Sabah Phase 1B, Northern Coastal Highway (NCH) in Sarawak, and Melbourne's Suburban Rail Loop (with an expected award timeline of end-June/July 2024)," it said.

CIMB Securities said Gamuda had expected additional employment opportunities in Taiwan due to the expansion of LRT systems, with potential contract wins projected ranging between RM2 billion and RM3 billion annually in the medium to long term.

The firm said Gamuda had reported satisfactory third quarter for financial year 2024 (3QFY24) results, with core earnings increasing 13 per cent quarter-on-quarter (QoQ) despite a 25 per cent decline in revenue.

"The results were in line with expectations but fell short of market forecasts. 

"The company maintains its FY24 core net profit forecast at RM922 million, anticipating improved performance in the fourth quarter of fiscal year 7/24 (4QFY7/24)," it added. 

CIMB Securities maintained its "Buy" recommendation on Gamuda with an unchanged target price of RM7.50 based on sum-of-the-parts valuation.

"While keeping our earnings projections steady, we have raised our dividend per share forecast for financial year 2024, 2025 and 2026 (FY24/25/26) by 33 per cent compared to previous estimates, setting it at 16 sen for each year," it added.

https://www.nst.com.my/business/corporate/2024/06/1068465/gamuda-aims-double-revenue-rm30bil-raise-orderbook-over-rm30bil