Malaysian top stock Gamuda seen rising to record on growth

The company is confident of maintaining its order book target of RM40 billion to RM45 billion by the end of 2025

Optimism that Malaysian infrastructure firm Gamuda is set to achieve years of record revenues prompted some analysts to dramatically ramp up their share price forecasts.

At least eight analysts raised their price targets after Gamuda’s full-year net income surpassed RM1 billion (S$306 million) for the first time, boosted in part by a boom in local construction. Gamuda told analysts at a briefing at the end of last week that it expects revenue to reach RM35 billion for the 2028 financial year as it raised the compound annual growth rate target to 30 per cent from 20 per cent, according to research notes by firms including JPMorgan Chase and Kenanga Investment Bank.

“A multiyear earnings expansion has begun,” Nomura analysts led by Tushar Mohata wrote in a report, upgrading their call on the stock to a buy.

There’s no shortage of superlatives for the firm. Gamuda’s stock rose 3 per cent on Monday to RM5.69, within a whisker of the record RM5.70 reached in August. Analysts predict its price could climb as much as 28 per cent in the next 12 months. It’s already the biggest gainer in the past 12 months among local companies with a market capitalisation of more than US$5 billion.

The company has been a key beneficiary of Malaysia’s ambitions to become a data centre powerhouse, contributing to its record revenue of RM16 billion in the last financial year. In May, it won a data-centre contract worth over RM1 billion from Google’s Malaysian affiliate, according to company filings. Meantime, its expanding renewable-energy infrastructure portfolio is a foundation for recurring income, analysts said.

Gamuda is confident of maintaining its order book target of RM40 billion to RM45 billion by the end of 2025 as it sees opportunities in water, data centre, renewable and infrastructure projects in Malaysia, Taiwan and Australia. It reached an all-time high of RM36 billion last year.

SEE ALSO

“We maintain a positive outlook on Gamuda’s ability to secure additional large-scale projects,” TA Securities’ Thiam Chiann Wen, who raised her earnings forecast and target price to RM6.58, said in a note on Monday. The company has a “strong execution track record and entrenched market position as a preferred contender for high-complexity infrastructure works”.

Maybank Investment Bank revised its target price on Gamuda’s shares to RM6.17 from RM6.04 on expectations that margins will continue expanding due to a rising share of domestic construction projects. The brokerage also increased the earnings estimates by 3 per cent for the 2026 financial year, and by 7 per cent for the following year to reflect Gamuda’s higher-than-expected engineering and construction wins, Maybank analyst Yin Shao Yang wrote in a note on Monday.

UOB Kay Hian’s Jack Goh, however, is taking a more cautious stance with a hold recommendation, saying that valuations “appear fair” after the stock’s recent rally. Gamuda’s ability to execute its projects will now come under the spotlight, he said. BLOOMBERG