KUALA LUMPUR: Gamuda Bhd's newly secured RM1.71 billion hyperscale data centre contract is expected to yield a higher pre-tax profit (PBT) margin for the company.
Hong Leong Investment Bank Bhd (HLIB) said this contract marks Gamuda's first letter of award (LOA) secured in the financial year 2027 (FY27).
Similar to its previously secured data centre packages, the firm expects the project to yield a PBT margin of about eight per cent on a cost-plus basis.
"Following this award, data centre projects now account for about 10 per cent of its RM54 billion unbilled orderbook," it said in a note.
Gamuda has now secured two data centre packages at the same Port Dickson site owned by a US-headquartered multinational corporation (MNC).
"In our views, successive phases for the site, which entails a further six to seven data centres of similar size, should be up for grabs following the completion of water infrastructure works in 2027-2028," it said.
HLIB said Gamuda's job replenishment has gathered pace in recent months, closing FY26 with a RM25 billion contract win tally.
To maintain its unbilled order book of RM50 billion by the end of calendar year 2026 (CY26), the firm estimates the company would need to secure further RM5 billion to RM6 billion of new contracts for the rest of 2026 (factoring in a burn rate of RM1.2 billion per month).
"We view it as highly achievable. The near-term conversion pipeline includes the Northern Perak water project (about RM4 billion) and various renewable energy projects in Australia, as well as potential wins from the Penang LRT Systems package and MRT package in Taiwan," it said.
Overall, HLIB has maintained its forecasts, as this contract marks the first job secured under the firm's FY27 job win assumption of RM20 billion.
"We maintain our "Buy" rating with an unchanged target price of RM5.27.
"While earnings growth in FY26 has been relatively muted due to the early-stage execution of a large proportion of its orderbook, we expect earnings to accelerate from CY27 onwards as these projects enter the S-curve and higher-margin contributions begin to crystallise," it added.