Last updated on August 23, 2025
KUALA LUMPUR: With a steady stream of new contracts expected for Gamuda Bhd, CGS International is urging investors to focus on the group’s project wins rather than short-term earnings performance, while raising its target price to the highest among analysts.
The research house increased its target price for Gamuda from RM6.00 to RM7.30 — the highest among 21 brokerages covering Malaysia’s largest construction company by revenue. This figure is nearly 26% above the average target and implies a 33% upside from the latest closing price.
CGS International anticipates a wave of contract awards over the next six to 12 months, coupled with potential positive news from Budget 2026 in October. It also sees Gamuda as well-positioned to secure a majority of the five tenders for Google data centres in Malaysia.
“Given Gamuda’s proven execution capabilities, we believe the market will be more forgiving on earnings volatility,” the firm said. “As long as the company continues to expand its order book, its long-term earnings outlook should remain strong.”
Gamuda’s share price climbed to a fresh all-time high since its 1992 listing on Wednesday, outperforming the broader market with a 16% year-to-date gain. The rally has been fuelled by demand for data centres in Malaysia and the company’s success in landing high-profile global projects.
Market sentiment remains firmly bullish, with Bloomberg data showing 20 “buy” calls, one “hold”, and no “sell” recommendations.
At CGS International’s new target price, Gamuda would trade at 25 times its forecast FY2027 earnings — a valuation the firm considers fair, given the company’s projected 24% compound annual earnings growth over three years and its operations across four infrastructure markets.
As of June, Gamuda’s outstanding order book stood at RM37.2 billion, with RM18.4 billion in new contracts secured since the start of FY2025. Beyond domestic projects, it is also expected to clinch another contract in Taiwan.
Looking ahead to next year, the research house highlighted a promising pipeline, citing Gamuda’s early involvement in three renewable energy projects in Australia, its shortlisting for railway works in Australia, and a highway project in New Zealand.
