KUALA LUMPUR (Dec 14): Hong Leong IB Research has reinstated coverage of Gamuda Bhd at RM3.63 with a “buy” rating and target price of RM4.15 and said post going ex on Tuesday (Dec 13), the stock’s valuation looks attractive at FY2023/24/25 P/E multiple of 12.8x/11.3x/9.9x (-0.5SD) and P/B multiple of 0.9x (-0.5SD) despite still being in a contract upcycle .

In a note on Wednesday, the research house said it expects further order book growth to be underpinned by opportunities in Australia and selective opportunities domestically.

“Our earnings forecasts suggest a slight dip in FY2023 before rebounding in FY2024-25 driven by a ramp-up of its RM15.3 billion order book and recognition of record high unbilled sales of RM6.2 billion.

“Key catalysts include contract wins. Risks: project delays, execution in new markets, prolonged elevated materials prices, labour shortages and health of the property market,” it said.