• In a note on Monday, the research house said that based on its assessment, Ho Chi Minh City is set to grow and be a major driver of Gamuda Land’s growth in Vietnam while maintaining the country’s contribution of at least 25% to 30% of group revenue in the coming years.

KUALA LUMPUR (May 20): RHB Investment Bank Research has maintained its 'buy' rating for Gamuda Bhd (KL:GAMUDA) at RM5.58, with a higher target price of RM6.55 (from RM6.30), and said it is upbeat on the prospects Ho Chi Minh City (HCMC) has for Gamuda’s property arm.

In a note on Monday, the research house said that based on its assessment, HCMC is set to grow and be a major driver of Gamuda Land’s growth in Vietnam while maintaining the country’s contribution of at least 25% to 30% of group revenue in the coming years.

HCMC’s property market overview

RHB said that overall, property supply remains low, while demand is expected to remain stable-to-strong amid low interest rates, combined with better foreign direct investment in HCMC.

“In the first quarter of 2024, the primary supply of apartments in the city reached 4,922 units (-27% year-on-year).

“The slow legal completion process continually impacted on the market’s new supply. On the flip side, new supplies recorded a high absorption of 80%, indicating a vibrant apartment market in HCMC,” it said.

RHB made no changes to its earnings estimates, but tweaked its discount to property revalued net asset value to 45% from 50%.

“This is to reflect the bright prospects of HCMC’s property market, which is set to drive the growth of Gamuda’s overseas property segment.

“A specific catalyst for HCMC is faster-than-expected acquisition of new projects in HCMC, while a general catalyst for the group would be faster-than-expected job wins for its construction arm. Gamuda continues to be one of the cheapest large-cap construction stocks — trading at 14.7 times price-earnings (P/E) — and we view this is unjustified, as it was trading at 16 times P/E during the construction upcycle in mid-2017,” it said.

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!

SHARE
RELATED POSTS
  1. Malaysia in strategic position to be data centre regional hub — experts
  2. ERA Realtor shares formula to achieving RM10m sales within eight months powered by a positive culture
  3. Cohu opens 20,000-sq-ft semiconductor test design centre in Penang