Gamuda Shares Rise On Penang-Perak Water Supply Deal

KUALA LUMPUR, July 16 (Bernama) -- Gamuda Bhd’s shares rose 1.44 per cent in early trade on Thursday after its joint venture signed a bulk water supply agreement with Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP).

The agreement is to supply treated water to Penang from Perak under the Northern Perak Water Supply Scheme (NPWSS).

In a filing with Bursa Malaysia yesterday, Gamuda said the agreement establishes the long-term commercial framework for the 40-year treated water supply arrangement, governing the sale, supply and purchase of treated water from Kerian in northern Perak to the Penang border.

The agreement was signed by Prasarana Air dan Irigasi Perak Sdn Bhd, a wholly-owned subsidiary of Khazanah Air Perak Sdn Bhd, which was incorporated as a 50:50 joint venture company between Gamuda and Perbadanan Kemajuan Negeri Perak to undertake the NPWSS.

Hong Leong Investment Bank Bhd (HLIB) estimated that the NPWSS would yield an average annual profit after tax of RM100 million over its first 10 years of operation (Gamuda's share: RM50 million).

“The joint venture company will likely award the construction contract to Gamuda in the coming months, which we estimate to be worth RM4 billion. We maintain our forecasts with an unchanged target price of RM5.27,” it said in a note today.

Meanwhile, MBSB Investment Bank Bhd has maintained its 'buy' call on Gamuda with an unchanged target price of RM5.60.

It said Gamuda remains its top construction pick, supported by its record RM52.3 billion order book and improving earnings visibility.

“As 75 per cent of projects remain at the mobilisation and early execution stages, we believe financial year 2027 (FY2027) will mark the beginning of a stronger earnings upcycle.

“Beyond construction, the property division is also entering its next growth phase, underpinned by a RM10 billion launch pipeline in FY2027 across Vietnam, Singapore and Malaysia,” it added.

At 10.35 am, the counter rose seven sen to RM4.23, with 2.80 million shares traded.

-- BERNAMA