Bags An EPC Job for Goulburn River Solar Farm of AUD625mn

GAMUDA has announced that its wholly owned subsidiary, DT Infrastructure Pty Ltd, has secured an engineering, procurement, and construction (EPC) contract from Goulburn River Trust, a special purpose vehicle fully owned by Lightsource bp Renewable Energy Investments Limited.

The AUD625mn contract (equivalent to RM1.8bn) involves civil, structural, and electrical infrastructure works for the 585MW Goulburn River Solar Farm, situated in the Upper Hunter Region of New South Wales.

The project is scheduled to commence on 1 January 2025, with a targeted completion timeline of 24 months. Once operational, the solar farm is expected to contribute significantly to New South Wales’ energy supply.

Who Is Lightsource Bp?

Lightsource bp, now fully owned by BP Plc, is a global leader in solar energy, dedicated to providing affordable and sustainable power to businesses and communities. By developing utility-scale solar projects, the company plays a key role in supporting energy decarbonisation, enhancing supply security, and promoting local economic growth.

In Australia, Lightsource bp has an impressive portfolio of projects, including the 350MWdc Lower Wonga solar farm integrated with battery energy storage systems (BESS) and the 107MWdc West Wyalong solar project, which is nearing financial close through a power purchase agreement with Snowy Hydro. Additional developments include the 90MWdc Wunghnu solar farm and the 840MWdc Sandy Creek solar farm, both of which also incorporate BESS technology.

Our Views

In Australia, Lightsource bp has an impressive portfolio of projects, including the 350MWdc Lower Wonga solar farm integrated with battery energy storage systems (BESS) and the 107MWdc West Wyalong solar project, which is nearing financial close through a power purchase agreement with Snowy Hydro. Additional developments include the 90MWdc Wunghnu solar farm and the 840MWdc Sandy Creek solar farm, both of which also incorporate BESS technology.

Based on a projected PBT margin of c.4.5%, as guided by management, this project is expected to contribute a net profit of RM61.6mn throughout its construction period.

Looking forward, GAMUDA appears well-positioned to exceed the upper range of its internal order book target of RM30bn-35bn. This optimism is bolstered by potential contracts for the Penang LRT and Upper Padas Water Scheme projects, alongside anticipated awards for data centre projects under its new digital pillar.

Impacts

No changes to our earnings estimates, as the new job win falls within our FY25 new job replenishment assumption of RM20bn.

Valuation

We maintain our SOP-derived target price of RM12.31, inclusive of a 3% ESG premium based on our 4-star rating. Maintain Buy call on the stock.

Source: TA Research - 17 Dec 2024