Gamuda has announced securing a RM451.4m contract to construct a data center (DC) block for BCEI Malaysia SB (BCEI) in Cyberjaya. We are encouraged by this development, as it highlights Gamuda's strong technical expertise and capability in delivering fast-track DC projects. With this addition, the Group's total outstanding order book is now estimated at RM31.4bn. Although we view the contract win positively, our forecasts remain unchanged, as it aligns with our order book replenishment assumption of RM16bn. We maintain an Outperform rating on Gamuda, with an unchanged SOTP-based target price of RM9.20.

• Project details. The contract includes the foundational, civil, structural and architectural works for the DC. Work is expected to begin immediately and be completed in first quarter of 2026.
• BCEI was incorporated in 2023 by Burr Computer Environments Inc. that specialises in planning, design and construction of information technology facilities for numerous Fortune 500 companies. BCEI focuses on creating adaptable facility infrastructures that enhance IT performance, improve availability, reduce operating costs, and support maintenance, upgrade, and expansion needs.
• Financial. The Group's unbilled order book has increased by 1.4% to approximately RM31.4bn. Assuming a mid-teen margins and a corporate tax rate of 24%, this project is expected to contribute about 1.7% to net profit for FY25-26F. However, we make no adjustments to our earnings estimates, as this is factored into our RM16bn order book replenishment assumption for FY25.

Source: PublicInvest Research - 4 Nov 2024