Gamuda's projects in Taiwan unaffected by earthquake, says RHB IB

• The research firm said the construction sites of Gamuda’s projects are far away from Hualien, at least 200km from the epicentre.

KUALA LUMPUR (April 4): Gamuda Bhd's projects in Taiwan were unaffected by the earthquake that hit the Hualien county on Wednesday, said RHB Investment Bank Bhd (RHB IB).

The research firm said the construction sites of Gamuda’s projects are far away from Hualien, at least 200km from the epicentre.

“There was no major impact coming from the earthquake, as the respective sites of Gamuda only felt a four to 4.5 magnitude on the Richter scale, which is considered to be a light earthquake that can be felt but generally causes no damage,” RHB IB said in a research note on Thursday.

RHB IB said that as of end-January, Taiwan jobs consisted of RM4.5 billion from six contracts, or 19% of Gamuda's RM24 billion outstanding order book.

Of the six ongoing jobs in Taiwan, rail-related projects have a completion rate of 1% and below, indicating that major works such as tunnelling may not have commenced, said the firm.

It said the rail projects include the Kaohsiung MRT (RM3 billion with an 88% effective share) secured in October 2023, and the Taoyuan City Underground Railway project (RM1.3 billion with 60% effective share) clinched in October 2022.

Other Gamuda jobs in Taiwan comprise mainly structures such as sea wall reclamation, marine bridges and their extensions, which were 75% to 90% completed as of January 2024.

Meanwhile, the research house maintained its 'buy' stance on Gamuda, with a target price of RM6.30.

However, it said a key risk includes slower-than-expected job replenishment from overseas.

As of the time of writing on Thursday, Gamuda's share price had risen six sen to RM5.32, with 2.18 million shares traded on Bursa Malaysia. 

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!