GAMUDA - MRT timeline intact

Record year. 3QFY11 net profit of RM117m (+24% qo-q, +40% y-o-y) takes 9MFY11 net profit to RM299m, within our but above consensus estimates. Q-o-q EBIT growth was led by construction (+74% to RM59m) and property (+33% to RM50m). 3QFY11 construction EBIT
margins continued to improve, to 13.9% from 8.3% a quarter ago, lifted by the double tracking project (62% complete). 9MFY11 property sales were already equal to our previous RM1bn forecast for FY11, so we revised it to RM1.3bn.

Briefing highlights. The Sungai Buloh-Kajang MRT line elevated works worth RM12-13bn could see substantial awards over the next six months. There will be c.20 packages for which 70 contractors have been prequalified. For the PDP, we are positive that prequalification for tunneling works worth RM7-8bn has started and will close on 27 June 2011. Tenders are
expected to open in 4Q11 with awards in 1Q12. Meanwhile, consultant Halcrow has completed its study on the remaining two lines, and the government is evaluating its proposal. Possible implementation date is mid-2012. In Vietnam, Celadon City was soft launched with 50 units registered to date. Official launch will be in July to coincide with the completion of the show unit.
Gamuda City is now slated for launch in Sep/Oct 2011 after ground works are done.

BUY – still most leveraged MRT proxy. Keep an eye on 27 June, the deadline for tunneling works prequalification, to see if the PDP is likely to secure the project. We still see Gamuda capitalising on its role as PDP for the conversion of RM10bn (50% share) tunneling contract wins for the entire MRT project.

Report From HWangDBS