Gamuda prospects enhanced by global footprint

PETALING JAYA: RHB Research continues to favour Gamuda Bhd for its diverse geographical portfolio, the variety of jobs being tendered for renewable energy (RE)-related projects, data centres (DC) and water-related infrastructure.

The brokerage firm in a report said the group is currently eyeing more green-related project opportunities in Australia.

Note that Australia has raised its capacity investment scheme target to 40GW from 32GW in July, which is set to drive nearly A$52bil in solar and wind technology investments.

Gamuda, via DT Infrastructure Pty Ltd, has already secured an onshore wind farm project in Queensland (RM700mil) and a solar farm project in New South Wales (RM1.8bil) in the financial year 2025 (FY25), RHB Research pointed out.

In addition, the Integrated System Plan released by the Australian Energy Market Operator shows that by 2050, Australia requires 10,000km of high voltage new transmission lines to carry RE nationwide.

“There are currently AU$53bil worth of transmission projects approved – earmarked or in planning – ahead of achieving Australia’s target of an 82% RE mix by 2030,” said RHB Research.

In December 2024, Gamuda via a joint-venture with Seymour Whyte Constructions, was shortlisted for the AU$1.1bil Hunter Transmission Project.

This ties well with Gamuda’s teaming agreement with Rohas Tecnic Bhd, a leading Malaysian supplier of turnkey solutions for transmission networks in April 2024 to bid for and build Australian transmission projects.

Meanwhile, RHB Research said it took comfort in Gamuda’s involvement in domestic RE-related and water projects such as the Ulu Padas Hydroelectric (UPH) dam in Sabah, which is expected for operation in 2030 and North Perak Water Supply Scheme (NPWSS) slated for operation in 2031.

“They not only provide engineering, procurement, construction and commissioning opportunities with a total estimate of over RM6bil, but also an avenue for recurring income at least RM50mil per annum combined as per our projections,” said the research house.

While there were no changes in its earnings estimates, RHB Research said “we take the opportunity to impute the valuations of the UPH and NPWSS projects into our sum-of-parts valuation, with UPH having an assumed tariff of 31.5 sen per kWh (similar to the 162MW Project Oriole hydropower project in Sabah) and NPWSS having an assumed blended water tariff of RM1.48 per cubic m (average of blended tariffs of Penang and Perak) with adjustments expected to take place every three years.”

Hence, RHB Research has arrived at a new target price of RM6.52 per share from RM5.86 previously. Risks include slower-than-expected job replenishment.