Research houses maintain 'buy' call on Gamuda

KUALA LUMPUR: RHB Research and Alliance Research have maintained their "buy" call on Gamuda, with a fair value of RM5.45 andRM5.84 respectively.

This follows the release of the company's nine-months financial year 2013 results that met expectations.

RHB Research said Gamuda had made good progress on the Sungai Buloh - Kajang Mass Rapid Transit (MRT) project.

"Gamuda has secured the best parts for the MRT project such as project delivery partner and high-margin tunnelling," it said in a research note today.

The research house said Gamuda is likely to take the lead in terms of reaction to a new price catalyst, as the Cabinet looks set to give its approval for the Line 2 of the Sungai Buloh to Serdang and to Putrajaya MRT line.

"It has given Gamuda a large market capitalisation and high Beta and share liquidity," it added.

Meanwhile, Alliance Research said Gamuda's reported nine-months core earnings of RM487 million, which was 20% higher year-on-year, came within its expectations. It said the next catalyst would be news flow on the upcoming Sungai Buloh - Serdang - Putrajaya line.

"We believe that Gamuda stands a good chance of undertaking both the project delivery partner and tunnelling contractor's roles," the research house said in a research note today.

Alliance Research said Gamuda had strong domestic sales of RM1 billion during the nine months, boosted by strong sales at Horizon Hills in Iskandar.

However, the research house said Gamuda's sales in Vietnam remained week and management was expecting zero sales for the next two years.

"New sales are likely to be offset against dropouts from past sales recognised," it added. - Bernama