GAMUDA (5398) : RHB maintains Buy on Gamuda
KUALA LUMPUR: RHB Research has maintained its Buy call on Gamuda with a target price of RM5.61 as the group remained as the best proxy to the buoyant construction sector in Malaysia given its dominant role in the RM73bil Klang Valley MRT project.
In a note on Tuesday, the research house said Gamuda proposed to acquire from private company Bukit Melati Sdn Bhd, a piece of leasehold (99 years expiring 2111) agricultural land in Tanjong Duabelas, Kuala Langat, Selangor, for RM392.2mil cash.
Gamuda intends to develop on the land an “extension” to its highly successful Kota Kemuning township which is only 2km away and currently at the tail end of its development.
"We are positive on this acquisition which we regard as a continuation of its effort to replenish its landbank in order to sustain its property profits over the longer term," it said.
At the price tag, RHB said Gamuda is effectively acquiring the land at RM35 per sq ft (psf).
"This is within the range of asking prices for leasehold agricultural land within the vicinity of between RM10 and RM40 psf (based on our checks at several online property portals).
"The acquisition will increase Gamuda’s net debt and gearing to approximately RM2bil and 0.37 times respectively (from RM1.6bil and 0.30 times as of Jul 30, 2014) which are still manageable," it noted.
http://www.thestar.com.my
KUALA LUMPUR: RHB Research has maintained its Buy call on Gamuda with a target price of RM5.61 as the group remained as the best proxy to the buoyant construction sector in Malaysia given its dominant role in the RM73bil Klang Valley MRT project.
In a note on Tuesday, the research house said Gamuda proposed to acquire from private company Bukit Melati Sdn Bhd, a piece of leasehold (99 years expiring 2111) agricultural land in Tanjong Duabelas, Kuala Langat, Selangor, for RM392.2mil cash.
Gamuda intends to develop on the land an “extension” to its highly successful Kota Kemuning township which is only 2km away and currently at the tail end of its development.
"We are positive on this acquisition which we regard as a continuation of its effort to replenish its landbank in order to sustain its property profits over the longer term," it said.
At the price tag, RHB said Gamuda is effectively acquiring the land at RM35 per sq ft (psf).
"This is within the range of asking prices for leasehold agricultural land within the vicinity of between RM10 and RM40 psf (based on our checks at several online property portals).
"The acquisition will increase Gamuda’s net debt and gearing to approximately RM2bil and 0.37 times respectively (from RM1.6bil and 0.30 times as of Jul 30, 2014) which are still manageable," it noted.
http://www.thestar.com.my
