4QFY21: Bumper quarter
Positively surprised; FY21 core profit up 12% YoY
FY21 core net profit of MYR588m (+12% YoY) was 135%/120% of MKE/ street forecasts as 4Q saw bumper contributions from E&C (KVMRT2 Phs 1 reached financial close) and property (from Celadon). We however lower FY22E/FY23E net profit by 6%/4% as E&C orderbook replenishment and property presales in FY21 fell short. We also introduce FY24E earnings. Our revised RNAV-TP is MYR4.00 (-5sen). Maintain BUY.
E&C and property did the heavy lifting
4QFY21 core net profit was up a sharp 51% QoQ despite the lockdowns in MY as (i) E&C pretax profit (before FRS11) rose 71% QoQ as the KVMRT2 Phs 1 reached financial close, thus reversing out contingency provisions and offsetting a MYR48.1m cost write-off for its Australia tenders (E&C
margins +3.7ppts QoQ to 21.5%); and (ii) works momentum at Celadon City caught up following delay in permit approvals in 2Q (property margins +38.4ppts QoQ to 54.2%). These offset (iii) weaker concession
earnings (-36% QoQ) as MCO 3.0/EMCO/FMCO-NRP1 (from 6 May/3 Jul/14 Jul) impacted tolled traffic volume (water ops earnings were stable).
Lowering FY22-23E earnings; dividends to return
In Aug 2021, Gamuda’s 50%-JV won a MYR460m contract in Taiwan, lifting its outstanding E&C orderbook to MYR4.5b. Property pre-sales slowed in 4QFY21 due to the lockdowns in MY, bringing FY21 pre-sales to MYR2.87b (+32% YoY), below its MYR3.5b target. Our earnings revisions incorporate the shortfall in E&C orderbook replenishment and property presales in FY21. We maintain our MYR2b p.a. E&C job win assumption, with the official award of the PSI Island A Phs 1 reclamation works (MYR4-4.5b) now expected to be delayed by 6-8 months. Dividends are expected to resume from FY22E after being suspended in FY21.
Orderbook replenishment; property presales target
Tender outcome for two Australian projects is expected over the next 6 months, while Gamuda will continue to engage with the government on the KVMRT3 which may take on a PPP model. Elsewhere, the internal target for FY22 property presales is MYR3.5b (+22% YoY), while unbilled sales of MYR4.6b end-Jul 2021 will lend support to FY22-23 earnings.