KUALA LUMPUR: RHB Research has maintained its Buy call on Gamuda with a target price of RM5.61, it said in a note on Thursday.
RHB said it likes Gamuda as it is the best proxy to public infrastructure spending in Malaysia given its dominant role in the RM73bil 3-line Klang Valley MRT project.
"It has reaped the best profits from the Klang Valley MRT project thanks to the 6% PDP fee anddouble-digit tunnelling margins, and poised to make an inroad tothe booming infrastructure and property sectors in Penang via a much anticipated winning bid for the PDP role of the RM27bil PenangTransport Master Plan," it said.
It added that Gamuda has finally obtained the green light from the Government to embark on the RM25bil Line 2 of the Klang Valley MRT project.
"With this, we believe it is on track to start work by mid-2016. Gamuda is the best proxy to the buoyant construction sector, given its dominant rolein Malaysia’s largest public infrastructure project," it noted.
It said the Government has formally appointed the 50:50 MMC-Gamuda JV as the project delivery partner (PDP) for the RM150bil elevated portion of the Sungai Buloh-Serdang-Putrajaya Line, which is also known as Line 2 of the Klang Valley MRT project.
"While the terms and conditions are still “to be negotiated and agreed”, we believe the key ones are unlikely to significantly deviate from those of Line 1, namely, “on-time delivery and within budget”, in exchange for a 6% PDP fee.
"For the RM10bil underground portion of Line 2, as per Line 1, we believe it is likely to be awarded on a Swiss challenge basis,ie via an international tender with the sole local bidder – MMC-Gamuda JV – being given the right to match the lowest/winning bid," it said.
RHB said it likes Gamuda as it is the best proxy to public infrastructure spending in Malaysia given its dominant role in the RM73bil 3-line Klang Valley MRT project.
"It has reaped the best profits from the Klang Valley MRT project thanks to the 6% PDP fee anddouble-digit tunnelling margins, and poised to make an inroad tothe booming infrastructure and property sectors in Penang via a much anticipated winning bid for the PDP role of the RM27bil PenangTransport Master Plan," it said.
It added that Gamuda has finally obtained the green light from the Government to embark on the RM25bil Line 2 of the Klang Valley MRT project.
"With this, we believe it is on track to start work by mid-2016. Gamuda is the best proxy to the buoyant construction sector, given its dominant rolein Malaysia’s largest public infrastructure project," it noted.
It said the Government has formally appointed the 50:50 MMC-Gamuda JV as the project delivery partner (PDP) for the RM150bil elevated portion of the Sungai Buloh-Serdang-Putrajaya Line, which is also known as Line 2 of the Klang Valley MRT project.
"While the terms and conditions are still “to be negotiated and agreed”, we believe the key ones are unlikely to significantly deviate from those of Line 1, namely, “on-time delivery and within budget”, in exchange for a 6% PDP fee.
"For the RM10bil underground portion of Line 2, as per Line 1, we believe it is likely to be awarded on a Swiss challenge basis,ie via an international tender with the sole local bidder – MMC-Gamuda JV – being given the right to match the lowest/winning bid," it said.
