GAMUDA (5398) - AmResearch retains Buy on Gamuda
KUALA LUMPUR: AmResearch is maintaining a Buy call on Gamuda Bhd with an unchanged target price of RM5.80 per share.
The research house said on Friday the group’s first half of financial year 2015 (1HFY15) results made up 50% of its full year net profit estimates and 48% of consensus estimates.
It expects the second half of the year results to be below the first half. Hence, it maintains its FY15 forecast net profit of RM 738mil.
AmResearch said Gamuda’s 1H earnings surged 10% year-on-year to RM368mil on the back of better work progress for underground works of MRT Line 1 as well as positive impact from a higher stake in KESAS.
“Overall progress for the elevated and tunnelling portions of MRT 1 have reached 61% and 50%, respectively,” it said
“On the other hand, the MMC-Gamuda joint venture’s project development partner (PDP) agreement should be completed by second quarter of this year.
“The joint-venture should also be in the running for the tunnelling job, where major works packages should be out from mid-2016 onwards,” it noted.
AmResearch said the group’s new property sales jumped 20% quarter-on-quarter to RM292mil but fell 45% year-on-year for the 1HFY15 to RM535mil dragged by Horizon Hills project in Johor.
It said although the group’s unbilled property sales accounted for RM1.5bil, but the management expects softening of the local property market particularly in Johor in 2015 and 2016.
“As such, the group has revised downwards its FY15F new property sales target by 34% to RM1.2bil,” it pointed out.
Gamuda has been actively expanding its landbank through various acquisitions in Kuang, Kundang, Kota Kemuning, and a 1,530- acre tract fronting ELITE that can be developed into future townships.
For its overseas expansion, the group acquired a freehold land on Chapel Street in Melbourne worth around RM114.51mil (A$40mil) that would be developed into apartment units with a gross development value of RM390mil, targeting to be launched by end this year.
"Apart from the MRT 2 project, we envisage several share price catalysts coming up for Gamuda:- (i) the PDP for the Penang Transport Master Plan, (ii) renewed hopes of a resolution for SPLASH and (iii) potential inclusion into the FBM KLCI 30 Index," AmResearch said.
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