---
endpoint: analytics
pattern: Infrastructure
status: done
latency_ms: 389442
conversation_id: b2a36372-82cb-45cb-b491-24003160780e
citations: 16
created: 2026-05-31 22:15:17Z
---

# Provide a one‑year narrative of Gamuda, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# Gamuda Berhad (5398 MK) — One‑Year Narrative (mid‑2025 → May 2026)

**Bottom line:** Over the last twelve months, Gamuda has cemented its transition from a Malaysian engineering contractor into a regional infrastructure-and-data-centre platform. The story has been driven by (i) a record‑high RM38bn construction orderbook delivered in FY2025, (ii) a steady drumbeat of high‑profile contract wins in data centres, hydro/solar, rail and overseas markets, and (iii) earnings that are growing but still tracking *behind* the most optimistic Street expectations — producing a sentiment arc that swung from euphoria (early 2025) → mid‑year reset → reaffirmed structural bull case → renewed re‑rating into 2026.

---

## 1. Setup at mid‑2025: tariff jitters and a "too quick" recovery

After the FBM KLCI bottomed on 9 April 2025 on Trump tariff fears, the index rallied 12.3% into mid‑May. CLSA's mid‑May strategy note ("Recovery too quick?") flagged Gamuda among the High‑Conviction Outperforms but warned that the market had "put Trump's 'reciprocal' tariff risk behind it" too quickly and that an economic slowdown was being under‑discounted [10][11].

CLSA's 1Q25 (calendar) results round‑up in June was the first reality check on Gamuda specifically:

- **2Q FY25 (Jan‑25 quarter) earnings missed CLSA expectations** — Gamuda was flagged under the "Below" bucket alongside Sime Darby, Petronas Chemicals and Dialog [14].
- Despite the miss, the share price reaction was relatively *benign* (+5.2% over three days post-result), suggesting investors were already looking through near‑term softness to the orderbook story [14].
- Consensus EPS for the FBMKLCI continued drifting down to 5.1% growth for 2025 (from 9% at the start of the year), and **Gamuda saw one of the harshest downward revisions at ‑11.0%** post‑results [13].

By 9 June 2025 CLSA carried Gamuda at **HC O‑PF, TP RM5.50, share price RM4.70**, with 2025/26 PE of 26.1x/20.1x and forecast EPS growth of 8.5%/29.6% [10] — i.e. the buy‑case rested squarely on the FY26 step‑up.

## 2. Mid‑2025 inflection: the data‑centre thesis takes over

The defining feature of Gamuda's narrative over the year has been the *data‑centre supercycle in Johor / Negeri Sembilan*:

- On **5 May 2025 Gamuda announced enabling works worth RM1.0bn for a data centre client in Negeri Sembilan**, a marker that Malaysian contractors — not just foreign EPC firms — were being trusted with hyperscaler campuses [12].
- CLSA's June 2025 data‑centre channel check concluded that contractors had "seen a run‑up recently but we still think **Gamuda looks attractive at 20x next FY PE (FYJul26CL)** with potential for earnings to double over the next three financial years" [11].
- The same note tracked a clean **re‑rating arc** in Gamuda's TP: SELL RM2.30 (Feb‑24) → BUY/O‑PF RM4.65 (mid‑2024) → HLD RM4.06 (Apr‑25) under prior coverage, before being absorbed into a new HC O‑PF call later in the year [11].

This was the moment the market re‑framed Gamuda from "a Malaysian construction stock with messy fiscal year" into a **GenAI‑adjacent infrastructure compounder**. Internal Gamuda commentary echoed this — management highlighted that Next‑Generation Digital IBS, originally designed for high‑rise housing, had been "extended to the data centre segment, where Gamuda has secured several projects, validating competitiveness in this fast‑growing market", with Negeri Sembilan cited as the showcase where "swift land conversion and early earthworks helped a global client fast‑track its data centre campus" [2].

## 3. FY2025 result (released 19 Sep 2025): "fourth consecutive record year"

Gamuda's full year ended 31 July 2025 confirmed the bull case in the numbers:

| FY July (RM m) | FY2021 | FY2022 | FY2023 | FY2024 | **FY2025** |
|---|---|---|---|---|---|
| Revenue (incl. JV) | 5,016 | 6,435 | 9,078 | 14,796 | **16,366** |
| Core net profit | 588 | 806 | 815 | 912 | **1,003** |
| Net gearing | 18% | 12% | 25% | 39% | **53%** |
| DPS (sen) | – | – | – | 8 | **10** |
| Share price at YE (RM) | 1.40 | 1.88 | 2.15 | 3.93 | **5.18** |
| Core PE (x) | 11.96 | 11.77 | 13.14 | 23.60 | **29.42** |

Source: Gamuda FY2025 Integrated Report [5]

Key features of the FY2025 print [1][2]:
- **Revenue +11% YoY to RM16.4bn**; net profit +10% to RM1.0bn — breaching the billion‑ringgit milestone for the first time.
- **Malaysia's revenue share rebounded to 36% (FY24: 25%)**, signalling that the domestic construction cycle (rail, water, data centre, hydroelectric) is firing again.
- **DPS lifted to 10 sen (FY24: 8 sen, FY23: 6 sen)** with a 57% payout — management telegraphing that the cash‑generation story is real, not just orderbook optics.
- **Gearing rose sharply to 53% (FY24: 39%)** — the principal investor‑sentiment overhang, given the self‑imposed 70% ceiling [2]. Borrowings grew to RM10.1bn vs RM7.8bn [5].

The orderbook itself is the headline:

| Construction orderbook (RM bn) | Malaysia | Overseas | **Total** |
|---|---|---|---|
| FY2021 | 3 | 2 | 5 |
| FY2022 | 3 | 11 | 14 |
| FY2023 | 6 | 15 | 21 |
| FY2024 | 7 | 18 | 25 |
| **FY2025** | **19** | **19** | **38** |

The orderbook "expanded nearly eightfold from RM5 billion in FY2021 to RM38 billion in FY2025", a 5‑year CAGR of c.40% [4]. The composition of the **RM25bn of new wins in FY2025** is the cleanest summary of management's strategic pivot [3]:

- **Transport & Infrastructure RM15.0bn** — Penang Mutiara Line LRT Phase 1 (RM6.4bn Jan‑25, revised to RM7.9bn), Xizhi Donghu MRT Taiwan (RM3.2bn Oct‑24), Kaohsiung LNG Terminal (RM2.6bn Jun‑25), Penang Silicon Island PIL2A (RM1.8bn Apr‑25).
- **Renewable Energy RM6.3bn** — Ulu Padas Hydroelectric Dam (RM2.4bn Sep‑24), Goulburn River Solar Farm + multi‑project Australia (RM3.2bn Dec‑24), Boulder Creek Wind (RM0.7bn).
- **Data Centres RM3.6bn** — Cyberjaya DC (RM0.5bn Nov‑24), Port Dickson DC enabling works (RM1.0bn May‑25), **Eco Business Park V Hyperscale (RM2.1bn Aug‑25)**.

## 4. 1H FY2026 print (released March 2026): margin lift, but JV drag

The most recently reported quarterly result — 6 months ended 31 January 2026 — confirmed the operating leverage thesis is intact but exposed two issues the market is now watching [6]:

| RM '000 | 2Q FY26 (Jan‑26) | 2Q FY25 (Jan‑25) | YoY | 1H FY26 | 1H FY25 | YoY |
|---|---|---|---|---|---|---|
| Revenue | 4,300,672 | 3,902,146 | **+10%** | 8,140,599 | 8,038,240 | +1% |
| Profit from operations | 362,621 | 268,068 | **+35%** | 683,833 | 574,829 | +19% |
| Finance costs | (77,261) | (46,156) | +67% | (130,364) | (106,759) | +22% |
| Share of JV profit | 7,839 | 41,361 | ‑81% | 20,966 | 52,891 | ‑60% |
| Net profit | 232,804 | 228,735 | +2% | 464,939 | 448,851 | +4% |
| Basic EPS (sen) | 3.89 | 3.86 | +1% | 7.58 | 7.51 | +1% |

Source: Gamuda Q2 FY26 quarterly report [6]

Two observations:

1. **Operating profit +35% in 2Q vs +19% YTD** — the underlying construction pipeline is finally translating into reported margin expansion as Penang LRT, Ulu Padas and the data‑centre packages progress.
2. **Finance costs +67% YoY** (driven by gearing pushed to >50%) and a **60% drop in JV contribution** (Horizon Hills property JV softness; tunnelling JVs in transition) compressed bottom‑line growth to just +2‑4%. That gap between operating momentum and reported EPS has been the swing factor in valuation debates this winter.

## 5. Spring 2026 — the contract drumbeat keeps coming

April–May 2026 brought a sequence of *fresh, post‑result* announcements that have re‑energised the narrative ahead of FY2026 full‑year:

- **5 May 2026 — Ulu Padas Integrated Hybrid (Sabah).** Revised Letter of Notification expanded the project from a 187.5 MW hydro plant into a hybrid hydro + 150 MWac floating solar concession (split tenures 40 yrs hydro / 25 yrs solar), forecast to generate **revenue exceeding RM450m p.a.** once operational. Hydroelectric SCOD on/before 31 Dec 2030; floating solar on/before 31 Dec 2031. Gamuda holds 45% [7]. This converts a one‑off EPC win into a long‑dated recurring‑income asset — supporting the bull thesis that Gamuda is evolving "from an EPCC contractor to a developer with long‑term asset‑ownership and recurring income potential" [2].
- **7 May 2026 — Kaohsiung Metropolitan MRT Xiaogang‑Linyuan Line RLC02 (Taiwan).** Notice of Award for a build‑only main‑contractor role; total contract sum NTD 26.4bn (~**RM3.30bn**), of which **70% (~RM2.31bn) accrues to Gamuda** in JV with Shang Ting. 7.4‑year project; 3 underground + 1 elevated station, 3.88 km of twin‑bound underground railway [8]. Taiwan is now Gamuda's second‑largest overseas market by orderbook, a deliberate diversification away from Australian‑only exposure.
- **19 May 2026 — Smoky Creek + Guthrie's Gap solar EPCs (Australia).** Two AUD550m EPC contracts (total **AUD1.1bn ≈ RM3.12bn**) awarded to DT Infrastructure (wholly‑owned Australian subsidiary). 2.5‑year delivery windows. Notice to Proceed already received [9].

Together these three announcements — within a 14‑day window in May 2026 — represent c.RM5.8bn of newly disclosed work, sustaining the orderbook story into FY2027.

## 6. What this meant for sentiment and valuation

| Period | Sentiment driver | CLSA stance / share price | Interpretation |
|---|---|---|---|
| May 2025 | KLCI tariff rebound; Gamuda 2QFY25 miss | HC O‑PF kept; TP RM5.50; price ~RM4.70 [10] | Earnings disappointment shrugged off — orderbook story dominant |
| June 2025 | DC channel check confirms hyperscaler pipeline | "Gamuda looks attractive at 20x next FY PE… earnings potential to double over the next three financial years" [11] | Re‑rating thesis reaffirmed; preferred contractor pick |
| Sep 2025 | FY2025 results — 4th consecutive record year [1] | Share price ends FY25 at RM5.18 vs RM3.93 a year earlier (+32%) [5] | Valuation expansion to 29x PE — premium justified by EPS visibility, not earnings beat |
| Mar 2026 | 1H FY26 — opex margin lift, JV drag, financing costs up | Net profit growth slowed to ~+4% YoY [6] | First sign of "earnings vs orderbook" gap; gearing watched |
| Apr‑May 2026 | Triple announcement (Ulu Padas hybrid + Kaohsiung MRT + Australia solar) [7][8][9] | Orderbook re‑filled by c.RM5.8bn in 2 weeks | Catalyst path back to upside; recurring‑income story reinforced |

CLSA's investment‑thesis summary at the June‑2025 vintage captures the essence of the bull case as it now stands: *"Historically an engineering leader in Malaysia, Gamuda has been able to make inroads into regional infrastructure projects using an industry leading digitalization investment. It has a strong management team that is recognised for its execution track record, which usually manifests in reasonably strong margins. Gamuda continues to be well positioned to ride Malaysia's wave of infrastructure spending."* [15]

CLSA's valuation framework — **PE‑to‑growth on a 23.3x July 2026 PE**, justified by a "three year net profit CAGR" of similar magnitude, with overseas wins providing the premium to historical multiples [16] — is broadly intact, but the bar is now high enough that **a slip on margin, JV contribution, or any execution wobble in Penang LRT / Sydney Metro West / Ulu Padas could pressure the multiple**.

## 7. Risks and unfinished narrative threads

- **Execution risk in new markets.** CLSA explicitly flags execution risk for construction projects in new markets and exposure to a slowing Vietnamese economy that could dampen property launches in Hanoi and HCMC [16]. With Vietnam contributions now keeping the property segment afloat (Malaysia sales fell to RM1.3bn in FY25, RM2.8bn from overseas [4]), this dependency is structural.
- **Concentration in large jobs.** "Given its job concentration in large projects, Gamuda is also exposed to policy risk in Malaysia" [16] — particularly relevant for the Penang Mutiara LRT and Ulu Padas hybrid as concession structures evolve.
- **Gearing/finance‑cost trajectory.** With net gearing at 53% [2] and finance costs +67% YoY in 2QFY26 [6], the FY26 numbers will be a stress test of whether operating leverage outpaces balance‑sheet cost. Headroom to the 70% ceiling is now <17pp.
- **Valuation digestion.** At 29x core PE on FY2025 [5] and 26x on FY2025E / 20x on FY2026E [10], Gamuda already prices in the orderbook step‑up. The next leg requires *delivery* — not new wins.

---

## Synthesis

Twelve months ago Gamuda was being bought as the cheapest‑looking Malaysian infrastructure proxy on data‑centre demand and a domestic megaproject revival. Over the year it has *delivered* on every key metric the market was underwriting — a record RM38bn orderbook, a fourth straight record P&L, a step‑up in dividends, and (most importantly) a continuous flow of *new* high‑quality wins in Malaysia, Taiwan, Australia and Sabah. What has changed is the bar: at 29x trailing PE with 53% gearing and JV/finance‑cost drag emerging, the market is no longer paying for a re‑rating — it is paying for *execution*. The May‑2026 trio of announcements (Ulu Padas hybrid, Kaohsiung MRT, Australia solar) re‑anchored the bull case just as 1H FY26's bottom‑line growth deceleration was raising doubts. The narrative arc for the year is therefore one of **structural re‑rating completed, with the next 12 months pivoting on execution rather than discovery**.

---
**Sources**

[1] Gamuda Berhad — Integrated Report FY2025 (period ended 31 July 2025), "Records Fourth Consecutive Record-Breaking Year"
[2] Gamuda Berhad — Integrated Report FY2025, Group CFO's Statement / Renewable Energy strategy / Data Centre bundling
[3] Gamuda Berhad — Integrated Report FY2025, New Orderbook Wins (RM25bn break-down)
[4] Gamuda Berhad — Integrated Report FY2025, 5-year Revenue / Property Sales trends
[5] Gamuda Berhad — Integrated Report FY2025, Five Years Financial Highlights
[6] Gamuda Berhad — Q2 FY2026 Quarterly Report (6 months ended 31 January 2026)
[7] Gamuda Berhad — Press Release, "Development of the Ulu Padas Hydroelectric Project in Sabah — Revised Letter of Notification" (5 May 2026)
[8] Gamuda Berhad — Press Release, "Kaohsiung Metropolitan Mass Rapid Transit System Xiaogang-Linyuan Line RLC02 — Notice of Award" (7 May 2026)
[9] Gamuda Berhad — Press Release, "Smoky Creek and Guthrie's Gap Solar Power Station Projects — Award of EPC Contracts" (19 May 2026)
[10] CLSA — Malaysia Strategy: "1Q25 results: outlook not as dire" (9 Jun 2025) — 607961581LinqAlpha.PDF (top‑picks comp sheet, Gamuda HC O‑PF TP RM5.50)
[11] CLSA — Malaysia Strategy: "Data centre channel check" (6 Jun 2025) — 607961433LinqAlpha.PDF (Gamuda preferred DC contractor)
[12] CLSA — Malaysia Strategy: "Data centre channel check" (6 Jun 2025) — 607961433LinqAlpha.PDF (Gamuda RM1.0bn Negeri Sembilan enabling works)
[13] CLSA — Malaysia Strategy: "1Q25 results: outlook not as dire" (9 Jun 2025) — 607961581LinqAlpha.PDF (‑11.0% Gamuda EPS revision)
[14] CLSA — Malaysia Strategy: "1Q25 results" (9 Jun 2025) — 607961581LinqAlpha.PDF (post‑result share price changes table)
[15] CLSA — SunCon: "Earnings up but downgrade to U‑PF" (16 Jun 2025) — 607962123LinqAlpha.PDF (Gamuda investment thesis)
[16] CLSA — SunCon: "Earnings up but downgrade to U‑PF" (16 Jun 2025) — 607962123LinqAlpha.PDF (Gamuda catalysts, valuation, risks)

## Citations

- [1] **Gamuda Bhd. (5398-MY) - Annual Report for period end 31-Jul-2025 (English) - PDF - 5 / 5** · external
- [2] **Gamuda Bhd. (5398-MY) - Annual Report for period end 31-Jul-2025 (English) - PDF - 5 / 5** · external
- [3] **Gamuda Bhd. (5398-MY) - Annual Report for period end 31-Jul-2025 (English) - PDF - 5 / 5** · external
- [4] **Gamuda Bhd. (5398-MY) - Annual Report for period end 31-Jul-2025 (English) - PDF - 5 / 5** · external
- [5] **Gamuda Bhd. (5398-MY) - Annual Report for period end 31-Jul-2025 (English) - PDF - 4 / 5** · external
- [6] **Gamuda Financial Results Q2FY26** · external
- [7] **Gamuda (LON_Ulu Padas Hydroelectric Project)** · external
- [8] **Gamuda (Notice of Award_Kaohsiung MRT)** · external
- [9] **Gamuda (Smoky Creek Guthrie Gap Solar Station Projects)** · external
- [10] **607961581LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961581LinqAlpha.PDF>
- [11] **607961433LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961433LinqAlpha.PDF>
- [12] **607961433LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961433LinqAlpha.PDF>
- [13] **607961581LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961581LinqAlpha.PDF>
- [14] **607961581LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961581LinqAlpha.PDF>
- [15] **607962123LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962123LinqAlpha.PDF>
- [16] **607962123LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962123LinqAlpha.PDF>

