Strong Order Book and Future Project Pipeline Support Long-Term Growth Expectations
KUALA LUMPUR (June 26) — Gamuda Bhd outperformed the broader market on Friday despite reporting weaker-than-expected quarterly results, as investors focused on the group’s strong construction pipeline and long-term earnings recovery prospects.
The counter rose as much as six sen, or 1.4%, to RM4.31, bucking a broader market selldown. While the stock remains down over 12% year-to-date, it has recovered from earlier lows triggered during geopolitical-driven market volatility.
Analysts Remain Broadly Positive Despite Target Price Revisions
Research houses have slightly revised down their target prices for Gamuda following recent earnings performance, but most maintain a positive “buy” stance on the stock.
Analysts expect earnings momentum to strengthen from 2027 onwards, driven by:
Higher progress billings from ongoing construction projects
Improved margins supported by easing input costs
Recovery in property sales performance
Strong project execution pipeline
One research house noted that concerns over margin pressure linked to geopolitical tensions and input cost volatility appear overstated, suggesting a more stable earnings outlook ahead.
Despite the adjustments in valuation targets, sentiment remains strongly supportive, with nearly all covered analysts maintaining a “buy” recommendation.
Robust Order Book Provides Earnings Visibility
Gamuda continues to benefit from a substantial outstanding construction order book valued at approximately RM52.3 billion.
This large backlog provides strong medium-term earnings visibility and supports the group’s position as one of Malaysia’s leading infrastructure and construction players.
Analysts also highlighted that the group is expected to secure additional contract wins worth an estimated RM20 billion by the end of December, further strengthening its long-term revenue pipeline.
Property Segment Expected to Recover
In addition to its construction business, Gamuda’s property development segment is also expected to improve after a period of weaker-than-expected sales performance.
The group plans to launch eight major projects over the next 12 months across Malaysia, Vietnam, and Singapore, with a combined estimated gross development value of around RM10 billion.
These upcoming launches are expected to support future sales growth and contribute to earnings recovery over the medium term.
Market Performance Reflects Mixed Sentiment
While short-term results have been softer than expected, investor sentiment remains supported by Gamuda’s strong fundamentals and long-term growth pipeline.
The stock continues to trade below its recent highs but remains one of the most widely recommended construction counters in the market, with only a small minority of analysts holding a neutral view and none recommending a sell.
Key Takeaways
Stock Outperformed Despite Weak Earnings
Gamuda rose up to 1.4% even after reporting weaker-than-expected quarterly results.
Analysts Still Broadly Positive
Most research houses maintain “buy” calls despite minor target price revisions.
Earnings Expected to Strengthen From 2027
Recovery driven by higher project billings and improved margins.
Massive RM52.3 Billion Order Book
Provides strong visibility for medium-term construction earnings.
Additional RM20 Billion Pipeline Potential
Expected new job wins could further strengthen backlog by end-2026.
Property Segment Set for Recovery
Eight upcoming launches worth RM10 billion across Malaysia, Vietnam and Singapore.
Long-Term Growth Story Intact
Despite short-term volatility, fundamentals remain supported by infrastructure demand.
Strong Market Confidence Persists
Near-unanimous analyst “buy” ratings reflect continued institutional confidence in the stock.
Yao Mu Realty, based in Kuala Lumpur, Malaysia, specializes in industrial real estate for factories and land, delivering professional and efficient solutions.
Posted by Yao Mu Realty Sdn Bhd on 26 Jun 26
Malaysia