Company Coverage
Gamuda (GAM MK): Earnings Under Construction; Vulnerabilities Offer Opportunities
BUY (Maintained)
Current price:
Target price:
Upside:
RM4.22
RM5.25
+24.4%
Analyst
Analyst
Highlights
- Gamuda is well positioned to deliver 25-30% earnings growth in FY27-28, backed by a compounding orderbook and deepening exposure in key markets.
- Its current record-high orderbook requires more time to be digested into exponential earnings delivery in FY27-28, as 90% of the outstanding orderbook has yet to reach peak execution (75% are in early stages).
- Valuations appear attractive with limited downside following reduced foreign shareholdings. Maintain BUY and target of RM5.25
Analysis
- Orderbook growth laying the foundation for FY27-29 growth. Gamuda has secured RM25.1b in orders in FY26 thus far, lifting the outstanding orderbook to a record-high RM52.3b. Assuming a RM4b quarterly orderbook burn rate, Gamuda has to secure another RM8b-13b to meet management’s orderbook guidance of RM50b-55b by end-26, which will likely be fulfilled by several tender outcomes that are pending finalisation.
- Earnings to pick up in 4QFY26, likely to achieve consensus’ RM1.05b forecasts for FY26. We expect the construction segment to ramp up progress billings in 4QFY26. For the property segment, we also expect a lumpy sales recognition in 4QFY26 although FY26 sales target has been revised downwards to RM4b (from RM5.5b) due to a delay in the Hanoi project’s approval. 9MFY26 property sales were only RM2.1b, indicating that roughly RM1.9b sales will be recognised in the upcoming 4Q results.
- Share price vulnerability and valuations’ discount propelled by steep foreign equity outflow; decent positioning opportunities. Gamuda’s share price has retraced 14% ytd, with foreign shareholdings having declined to 23.7% (from 26.2% at end-25 and 30.9% at end-24). This potentially reflects: a) profit taking after reporting impressive 2024-25 returns (115%); b) strengthening of MYR/USD to RM4.10 (+6% since Feb 26’s low of RM3.88); and c) investors de-risking from the construction sector amidst the upcoming 16th General Election. Valuations have also rationalised to 18x 2027F PE (+0.5SD above mean) vs 22-23x PE in 2025, offering limited downside and decent positioning opportunities.
Highlights
- Gamuda is well positioned to deliver 25-30% earnings growth in FY27-28, backed by a compounding orderbook and deepening exposure in key markets.
- Its current record-high orderbook requires more time to be digested into exponential earnings delivery in FY27-28, as 90% of the outstanding orderbook has yet to reach peak execution (75% are in early stages).
- Valuations appear attractive with limited downside following reduced foreign shareholdings. Maintain BUY and target of RM5.25
Analysis
- Orderbook growth laying the foundation for FY27-29 growth. Gamuda has secured RM25.1b in orders in FY26 thus far, lifting the outstanding orderbook to a record-high RM52.3b. Assuming a RM4b quarterly orderbook burn rate, Gamuda has to secure another RM8b-13b to meet management’s orderbook guidance of RM50b-55b by end-26, which will likely be fulfilled by several tender outcomes that are pending finalisation.
- Earnings to pick up in 4QFY26, likely to achieve consensus’ RM1.05b forecasts for FY26. We expect the construction segment to ramp up progress billings in 4QFY26. For the property segment, we also expect a lumpy sales recognition in 4QFY26 although FY26 sales target has been revised downwards to RM4b (from RM5.5b) due to a delay in the Hanoi project’s approval. 9MFY26 property sales were only RM2.1b, indicating that roughly RM1.9b sales will be recognised in the upcoming 4Q results.
- Share price vulnerability and valuations’ discount propelled by steep foreign equity outflow; decent positioning opportunities. Gamuda’s share price has retraced 14% ytd, with foreign shareholdings having declined to 23.7% (from 26.2% at end-25 and 30.9% at end-24). This potentially reflects: a) profit taking after reporting impressive 2024-25 returns (115%); b) strengthening of MYR/USD to RM4.10 (+6% since Feb 26’s low of RM3.88); and c) investors de-risking from the construction sector amidst the upcoming 16th General Election. Valuations have also rationalised to 18x 2027F PE (+0.5SD above mean) vs 22-23x PE in 2025, offering limited downside and decent positioning opportunities.
BUY (Maintained)
Current price:
Target price:
Upside:
RM4.22
RM5.25
+24.4%
Analyst
Analyst
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