GAMUDA's fully-owned Australian subsidiary, DT Infrastructure Pty Ltd (DTI), has secured a new contract worth AUD243mn (approximately RM702mn) from Aula Energy Asset Hold Trust (Aula Energy) and CS Energy Limited (CS Energy). This contract involves designing and constructing a wind farm 40 km southwest of Rockhampton, Queensland, Australia. Key project details include:

(i) The project will feature 38 turbines, each with a 6MW capacity, providing a total output of 228 MW.

(ii) It will support Queensland’s goal of generating 50% of its electricity from renewable sources by 2030.

(iii) DTI will handle the civil and electrical balance of plant works for the project.

(iv) Construction includes building 41 km of access roads with slopes of up to 15% and moving roughly 700,000 m³ of earth for bulk excavation and fill.

(v) The Cypress-146 turbines for the project will be supplied by GE Vernova.

Aula Energy, an Australian renewable energy company, focuses on developing, building, and operating onshore projects, with expansion plans into New Zealand. As part of Macquarie Asset Management’s renewable energy portfolio, Aula is working on a 4GW portfolio to power 1.8mn homes. Since 2023, it has been involved in projects like the 270MW Carmody’s Hill Wind Farm in South Australia and a 2.4GW wind farm development in Western Australia, in partnership with Green Wind Renewables.

CS Energy, a Queensland Government-owned company, supplies power to some of the state’s largest industries. It generates and sells electricity, acts as a retailer for commercial and industrial customers, and invests in new energy technologies, with a portfolio that includes thermal power stations, solar and wind energy, renewable hydrogen, and energy storage.

The project is scheduled to begin in late CY24 and is expected to be completed within 32.5 months.

Our Views

This marks GAMUDA's first Australian project secured in FY25, significantly contributing to the group’s target of achieving RM25bn in new job replenishments for FY24-25. In FY24, GAMUDA secured RM9.3bn in new contracts, excluding the recently awarded Upper Padas Hydro (UPH) project, which is still pending the finalisation of its project value. Assuming the UPH project is valued at c.RM4bn, this Australian wind farm project would bring the total job wins to RM14bn for FY24-25. Correspondingly, GAMUDA’s total outstanding order book has increased to RM25.5bn, equivalent to 2.4x FY24 construction revenue.

Assuming a net margin of c.4%, this project is estimated to contribute a net profit of around RM28.1mn throughout the construction period.

Impacts

No changes to our FY25-27F earnings forecasts, given the new job win falls within our new job replenishment assumption.

Valuation

We reiterate our SOP-derived target price of RM10.37, which includes a 3% ESG premium based on our 4-star rating. Maintain a Buy recommendation on the stock.

Source: TA Research - 30 Sept 2024