[nazrey]

WORLD 2022
Part 13: Australia | Gamuda Bhd
Gamuda likely to secure contracts worth billion this year from domestic and Australia, says CGS-CIMB Research
By Ayisy Yusof - February 4, 2022 @ 9:45am

KUALA LUMPUR: Gamuda Bhd could secure contracts worth billions from several developments in 2022, namely the potential reactivation of the Mass Rapid Transit III (MRT3), a new bypass construction package in Australia and the revival of the Penang South Islands (PSI) land reclamation.

CGS-CIMB Research said Mass Rapid Transit Corp Sdn Bhd might relaunch the MRT3 project worth between RM20 billion and RM30 billion with civil works tender in the first half of 2022.

There are potential awards for the ongoing bid in Australia, averaging up to RM6 billion and the tender process for one new bypass construction package in New South Wales, for which the Gamuda- Ferrovial joint-venture (JV) has emerged as among the three shortlisted bidders.

The research firm said Gamuda could also benefit from the government's review of the divestment of the company's domestic highway assets via a highway trust proposal.

CGS-CIMB Research said Gamuda would still be among the main contenders for the MRT 3 in the civil works tender rounds, which could be launched in the second quarter of 2022, even with a potential change in the structure of the civil works component.

"We are positive the underground scope will likely be tendered as one single package as this bodes well for the MMC-Gamuda JV given its strong track record and credentials in the tunnelling scopes of MRT 1 and MRT2."

CGS-CIMB Research said Gamuda's end-October 2021 net gearing of 0.17 time translated into an additional borrowing capacity of over RM4 billion, based on the company's self-imposed net gearing limit of 0.7 times.

"This allows ample room for Gamuda to participate in the private sector funding component of the MRT 3 project."

CGS-CIMB Research said the PSI land reclamation project could also be launched in the second half (2H) of 2022, following the earlier setback related to a court ruling in favour of a fishing community's appeal to revoke the environmental impact assessment (EIA) approvals.

"We gather the progress is back on track, with resubmission of the project's EIA application targeted by March 2022 and likely approval by mid-2022, and the start of works is targeted for 2H of 2022."

The research firm said Gamuda's share price is at attractive levels and has reiterated an Add call with a target price of RM3.88.

https://www.nst.com.my/business/2022...-and-australia