GAMUDA - Above expectations; maintain OUTPERFORM (CIMB)

Although Gamuda’s annualized 9MFY7/11 core net profit was 1% below our forecast (5% higher than consensus), we consider it to be above expectations as construction margins topped expectations and property sales surpassed both our and management’s targets for the full year. As this will help drive 4Q earnings, we raise our FY11-13 EPS forecasts by 2-4% and DPS forecasts by around 1-2%. Gamuda’s earnings momentum is building up and it is heading for a record year in FY11. We maintain our OUTPERFORM call and nudge up our RNAV-based target price from RM5.60 to RM5.63. Groundbreaking for the MRT project is slated for 8 July, which could be a share price catalyst, together with the strong 3Q results.