CIMB Equities Research continues to feel optimistic about Gamuda’s prospects in 2009, which ties in with the government’s pump-priming agenda.
“We believe that there is a high chance that the group will land contracts in its areas of specialty, particularly railway-related projects,” said the research house on April 2 as it reaffirmed a Trading Buy on Gamuda at RM2.04.
In a research note, it said Gamuda was still the laggard in its construction universe and was trading at over 60% discount to its realized net asset value (RNAV).
Gamuda had underperformed the research house’s other top pick in the construction sector, IJM Corp (Trading Buy) which had risen by more than 30% this year versus 5% for Gamuda.
The risk of further erosion in its foreign shareholding (43% now) was limited given the pick-up in prospects for the construction sector.
However, its target price was trimmed by five sen to RM2.90 as a result of the earnings downgrade.
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