Maybank IB: Gamuda Bhd a ‘buy’ because…
I do not own any Gamuda Bhd shares. However, I do think they are an interesting proposition. This is considered a high-tech engineering and construction company and if they win more projects to do, then they would be able to continue earning good profits which will certainly help in the movement of the share price.
Here is one latest analysis of what would the potential of Gamuda Bhd be. In fact based on their target price, it represents a 27 percent upside from the price of Gamuda Bhd end of 22 March 2022. Here that price and also some other details from google.com (the best place to find information)
Article in theedgemarkets.com Maybank Investment Bank (Maybank IB) has maintained engineering and construction, property development and water and expressway concessions group Gamuda Bhd as a “buy.” In a research note, Maybank IB said Gamuda’s recent RM6.5 billion win in Australia reaffirms its capability.
Higher pre-sales could also be expected of its property projects as it embeds sustainability into both design and concept. Maybank IB said, “A highway trust for its four tolled urban highways, if it materialises, will unlock value.”
The research firm remains optimistic on Gamuda securing the Klang Valley Mass Rapid Transit Line 3 (KVMRT3) undergound works based on its strong delivery track record and balance sheet, and cost advantage position with a fully depreciated tunnel boring machine (TBM) fleet. Please do refer to the details of the report here: Article in theedgemarkets.com
Construction is not like a supermarket counter play yeah
When we buy into a supermarket share counter, it would usually have a stable revenue every quarter. They could expand but generally, their sales revenue from all existing supermarkets would be rather stable. Meanwhile for a counter like GAMUDA Bhd, it has to continue winning new construction projects. If it wins, then the profits for the next financial year will be more than the year before BUT when the project is almost completed, it has to find another project. Else, the revenue and profit will start to move downwards.
As a typical investor, we could only read news about their bidding. It’s not like a supermarket counter which we could actually drop by and see if it’s doing well or badly as part of the due diligence. Happy investing.
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