KUALA LUMPUR (Dec 12): RHB Research Institute had downgraded GAMUDA BHD [] to market perform and cut its fair value to from RM3.41 to RM3.02.
It said on Monday that it expects 1QFY07/12 net profit to come in at RM100 million to RM105 million that will have met its expectations but miss the market consensus.
“We believe 1QFY07/12 core net profit declined 17-21% on-quarter due to the absence of a writeback of over-provision of scheduled highway maintenance, continued easing in property profits and slightly reduced CONSTRUCTION [] margins,” it said.
“Fair value cut from RM3.41 to RM3.02, now valuing Gamuda’s construction business at 12 times one-year forward earnings (from 14 times previously),” it said.
RHB Research said this was in line with the downgrade in its one-year forward target PER for the construction sector to 8.0 times and 12 times (from 10 times to 14 times previously).
It said on Monday that it expects 1QFY07/12 net profit to come in at RM100 million to RM105 million that will have met its expectations but miss the market consensus.
“We believe 1QFY07/12 core net profit declined 17-21% on-quarter due to the absence of a writeback of over-provision of scheduled highway maintenance, continued easing in property profits and slightly reduced CONSTRUCTION [] margins,” it said.
“Fair value cut from RM3.41 to RM3.02, now valuing Gamuda’s construction business at 12 times one-year forward earnings (from 14 times previously),” it said.
RHB Research said this was in line with the downgrade in its one-year forward target PER for the construction sector to 8.0 times and 12 times (from 10 times to 14 times previously).
