---
endpoint: analytics
pattern: Infrastructure
status: done
latency_ms: 177433
conversation_id: 98da4277-c2c7-44a6-a64f-9162cc14c45d
citations: 11
created: 2026-05-31 22:13:56Z
---

# What is Gamuda’s core business franchise and the key components of its operating model?

## Gamuda Bhd (GAM MK) — Core Business Franchise & Operating Model

Gamuda Berhad is a Malaysia-listed engineering, construction, and infrastructure conglomerate with growing regional reach and an emerging digital-infrastructure adjunct. CLSA frames it as **"historically an engineering leader in Malaysia [that] has been able to make inroads into regional infrastructure projects using an industry-leading digitalization investment,"** backed by a management team recognised for execution and reasonably strong margins [1].

---

### 1. Core Business Franchise — Four Operating Segments

Gamuda is most cleanly described through CLSA's pre-PEG SOTP framework, which broke the franchise into four cash-generating units [2]:

| Segment | Stake | Business | RNAV (RMm) | Contribution to RNAV/share |
|---|---|---|---|---|
| **Construction** | 100% | Civil & infrastructure engineering — MRT, highways, tunnels, public infra, data centres | 22,567 | RM 8.34 (~76%) |
| **Property** | Various | Township and high-rise development in Malaysia, Vietnam (Celadon City HCMC, Hanoi), Australia, UK | 5,729 | RM 2.12 (~19%) |
| **Hydrodam (Sabah)** | 45% | Concession asset — DCF-valued, post-tax WACC 5.3%, initial outlay RM360m | 636 | RM 0.23 |
| **Water Supply O&M** | 80% | Sungai Selangor 1 & 3 operations & maintenance concession (extension expected) | 645 | RM 0.24 |
| **SOTP Total** | | | **29,577** | **RM 10.93** |

Construction is the dominant earnings engine (≈76% of RNAV); property is the cyclical secondary leg; hydropower concession and water O&M are smaller, annuity-like cash assets [2].

In the most recent quarter disclosed in the report (1QFY25), Construction generated RM3,089m revenue (+38% YoY) at a 4.6% net margin, while Property generated RM1,102m (+82% YoY) at a 5.8% net margin — with property margin compressing on the maturation of Vietnam's Celadon City development [7].

---

### 2. Key Components of the Operating Model

**a) Orderbook-driven construction engine.** The franchise economics hinge on continually replenishing an unbilled construction orderbook. Management guided the unbilled orderbook to reach **RM40–45bn by end-CY2025, from ~RM30bn** at the time of the report, and said it "would not be surprised if net earnings double by FY27 from FY24 levels" [7]. CLSA models a three-year (FY24–FY27) core net profit CAGR of 23.3%, with revenue rising from RM13.3bn (FY24A) to RM20.1bn (FY27CL) [9].

**b) Geographic diversification beyond Malaysia.** The growth catalysts span three jurisdictions: **Malaysia (data centres, public infrastructure, renewable energy), Taiwan (public infrastructure), and Australia (renewable energy, public infrastructure)** [4]. Overseas net profit contribution from construction has trended up to ~RM72m/quarter at ~3.2% margin by 1Q25, while overseas property earnings have been more volatile [data shown in segmental tables].

**c) Property development with regional footprint.** Property earnings tie to township launches in Malaysia and overseas projects (notably Vietnam's HCMC/Hanoi and Australia). The franchise is sensitive to Vietnamese macro — "a slowing Vietnamese economy could dampen demand for property launches in Hanoi and Ho Chi Minh City" [6].

**d) Annuity concessions (hydropower + water O&M).** Sabah Hydrodam (45% stake) and Sungai Selangor 1 & 3 water O&M (80% stake) provide DCF-valuable, contracted cashflows that anchor the lower-risk portion of the asset base [2].

**e) Emerging digital-infrastructure arm.** Gamuda is positioning itself as a key Google Cloud partner via two vehicles [3]:

- **50/50 JV with Dagang NeXchange (DneX)** to be the sole vendor of **Google Distributed Cloud (GDC) air-gapped services** to government and private clients in Malaysia. Gamuda contributes domain expertise via its in-house **Gamuda AI Academy**; DneX brings IT capability and customer relationships.
- **20% equity stake in Cloud Space Sdn Bhd** (Malaysia's sole Google Cloud Premier Partner) for **RM18m** — first RM9m paid up front as growth capital, second RM9m contingent on hitting financial milestones in 3–5 years. The structure gives Gamuda **first right to collaborate on any new large-scale cloud project in Malaysia with a minimum 50% equity stake**.

This sits on top of an existing **200-person internal digitalisation department** that the company leverages for execution and innovation across the core construction franchise [8].

**f) Data-centre EPC as the near-term growth wedge.** Gamuda is increasingly being positioned by sell-side as one of the primary Malaysian beneficiaries of US hyperscaler data-centre buildout. On 5 May 2025, Gamuda announced **enabling works worth RM1.0bn for a data centre client in Negeri Sembilan**; CLSA prefers it alongside IJM among contractors playing the DC theme [10]. Even after share-price run-ups, CLSA still flagged Gamuda as attractive at "20x next FY PE (FYJul26CL) with potential for earnings to double over the next three financial years" [11].

---

### 3. Capital & Ownership Structure

- **Major shareholders**: Permodalan Nasional Berhad (PNB) **17.5%** and Employees Provident Fund (EPF) **14.7%** — i.e., the franchise is anchored by two large Malaysian state-linked institutional holders [5].
- **Financial profile (FYJul, RMm)** [9]:

| FY (Jul YE) | Revenue | Net Profit | EBIT margin | ROE | Net debt/equity |
|---|---|---|---|---|---|
| 2023A | 8,220 | 1,852 | 13.8% | 17.9% | 34.4% |
| 2024A | 13,347 | 912 | 5.7% | 8.2% | 44.3% |
| 2025CL | 14,114 | 1,096 | 9.9% | 9.3% | 39.4% |
| 2026CL | 16,394 | 1,274 | 9.8% | 10.2% | 45.5% |
| 2027CL | 20,062 | 1,678 | 10.4% | 12.3% | 47.7% |

The model is **capital-intensive** (FY23 capex/sales reached 40.7% during heavy investment) but normalising toward 3–4% capex/sales in the forward years, with leverage rising into the mid-40s% net debt/equity as working capital expands with orderbook execution [9].

---

### 4. Key Risks to the Operating Model

CLSA flags three structural risks that map directly to the operating model components above [6]:

1. **Execution risk in new markets** — as overseas construction (Taiwan/Australia) scales, execution variance is the dominant operational risk.
2. **Vietnamese macro** — property launches in HCMC and Hanoi are exposed to a slowing Vietnamese economy.
3. **Policy/concentration risk in Malaysia** — given Gamuda's heavy involvement in large public-infrastructure jobs, policy shifts (e.g., project sequencing, mega-project reviews) can disproportionately affect its pipeline.

---

### Bottom Line

Gamuda's franchise is a **diversified Malaysian engineering & infrastructure platform** built on four operating pillars — Construction (~76% of value), Property (~19%), and two concession assets (Hydrodam, Water O&M) — supplemented by an emerging digital-infrastructure adjunct (Google Distributed Cloud JV + Cloud Space stake) that leverages an in-house 200-person digitalisation department [1][2][3][8]. The operating model is **orderbook-driven** (targeting RM40–45bn unbilled by end-2025), **margin-recovering** (EBIT margin guided back to ~10% from 5.7% trough in FY24), and **increasingly regional**, with Taiwan and Australia layered on top of the Malaysian base and data-centre EPC providing the near-term growth wedge [7][9][10][11].

---
**Sources**
[1] Gamuda - O-PF (Earnings miss on weaker margins) — CLSA (12 Dec 2024) — 607946624LinqAlpha.PDF (Investment thesis)
[2] Gamuda - O-PF — CLSA (12 Dec 2024) — SOTP valuation table (Construction/Property/Hydrodam/Water O&M)
[3] Gamuda - O-PF — CLSA (12 Dec 2024) — DneX JV & Cloud Space stake details
[4] Gamuda - O-PF — CLSA (12 Dec 2024) — Catalysts (Malaysia/Taiwan/Australia)
[5] Gamuda - O-PF — CLSA (12 Dec 2024) — Major shareholders
[6] Gamuda - O-PF — CLSA (12 Dec 2024) — Investment risks
[7] Gamuda - O-PF — CLSA (12 Dec 2024) — 1QFY25 results / orderbook guidance
[8] Gamuda - O-PF — CLSA (12 Dec 2024) — Cloud move & 200-person digitalisation department
[9] Gamuda - O-PF — CLSA (12 Dec 2024) — Financials at a glance (FY23A–FY27CL)
[10] Malaysia Strategy (Data centre channel check) — CLSA (6 Jun 2025) — 607961433LinqAlpha.PDF (RM1bn DC enabling works)
[11] Malaysia Strategy (Data centre channel check) — CLSA (6 Jun 2025) — DC contractor preference & valuation

## Citations

- [1] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [2] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [3] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [4] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [5] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [6] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [7] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [8] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [9] **607946624LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607946624LinqAlpha.PDF>
- [10] **607961433LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961433LinqAlpha.PDF>
- [11] **607961433LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961433LinqAlpha.PDF>

