Affin Hwang upgrades Gamuda's shares on potential projects

KUALA LUMPUR (May 9): Affin Hwang Capital Research has upgraded shares of Gamuda Bhd, as it believes the construction company has the advantage of securing several projects, including the Mass Rapid Transit line 3 (MRT 3).

Gamuda, according to the research house, is proposing to reduce the cost of the MRT3 project by at least half of the previous RM45 billion estimate to between RM20 billion and RM23 billion.

“We gather that the government may revive the project by end-2019 and call for tenders to appoint a turnkey contractor in 2020. Gamuda has competitive cost advantages to bid for the MRT3 as it has 12 tunnel-boring machines for MRT2 works that could be re-deployed for MRT3,” it said in a note.

Affin Hwang noted the Penang Transport Master Plan project, secured by Gamuda’s 60 per cent-owned company, SRS Consortium, is pending approval by the federal government authorities.

Its current order book of RM10.9 billion could increase nearly three-fold if both the PTMP and MRT3 projects are secured.

The research house set a target price of RM3.70 for Gamuda.

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