KUALA LUMPUR (Dec 14): ECM Libra Investment Research has downgraded GAMUDA BHD [] to Sell from Hold previously, and said the company’s share price was above the research house’s SOP valuation of RM2.94, which itself was subject to significant downside risk.
The research house said Gamuda’s 1QFY12 results scheduled to be announced on Dec 16 were expected to be in line with expectations.
However, it cautioned investors that the risk of the group’s exposure to the Vietnam property venture and SPLASH is substantial, at 43% of group RNAV per share.
“The Vietnamese property market continues to show signs of weakness as buyers face more difficulties in getting financing amid local credit tightening,
“Due to the water asset consolidation impasse in Selangor, Gamuda’s 40%-owned associate Syarikat Pengeluar Air Selangor Holdings Bhd (SPLASH) has about RM1 billion of receivables from cash-strapped Syarikat Bekalan Air Selangor Bhd (Syabas) owing to the deferred 37% tariff rate hike in 2009,” it said in a note Wednesday.
The research house said Gamuda’s 1QFY12 results scheduled to be announced on Dec 16 were expected to be in line with expectations.
However, it cautioned investors that the risk of the group’s exposure to the Vietnam property venture and SPLASH is substantial, at 43% of group RNAV per share.
“The Vietnamese property market continues to show signs of weakness as buyers face more difficulties in getting financing amid local credit tightening,
“Due to the water asset consolidation impasse in Selangor, Gamuda’s 40%-owned associate Syarikat Pengeluar Air Selangor Holdings Bhd (SPLASH) has about RM1 billion of receivables from cash-strapped Syarikat Bekalan Air Selangor Bhd (Syabas) owing to the deferred 37% tariff rate hike in 2009,” it said in a note Wednesday.
