Gadang earnings visibility intact with latest job win
PETALING JAYA: Gadang Holdings Bhd’s engineering, procurement, construction and commissioning (EPCC) new contract win is expected to boost the group’s current outstanding order book to about RM903.5mil, says TA Research.
This is after factoring in an assumed RM80mil order book burn rate in the first quarter of financial year 2026 (1Q26).
It also represents 2.8 times of its financial year 2026 construction revenue forecast, providing healthy earnings visibility, said the research house in a note to clients.
The Gadang-JS Solar Consortium, comprising Gadang’s wholly-owned subsidiary Gadang Engineering (M) Sdn Bhd (51% stake) and JS Solar Sdn Bhd (49% stake), had recently secured an EPCC contract worth RM52mil from Tenaga Aspirasi Sdn Bhd for the development of a 15MWac large-scale solar photovoltaic (LSSPV) power plant in Tawau, Sabah.
Gadang secures RM52mil solar project in Sabah
PETALING JAYA: Gadang Holdings Bhd has accepted a letter of acceptance from its indirect 60%-owned subsidiary, Tenaga Aspirasi Sdn Bhd, to undertake the engineering, procurement, construction and commissioning (EPCC) of a 15 MWa.c. large-scale solar photovoltaic (LSSPV) power plant project in Tawau, Sabah, worth RM52mil.
In a filing with Bursa Malaysia, Gadang said the contract was secured via a consortium comprising its wholly-owned subsidiary, Gadang Engineering (M) Sdn Bhd and JS Solar Sdn Bhd.
“The consortium will undertake the full EPCC scope including design, procurement, construction, installation, testing and commissioning of the LSSPV plant.
New property developments to bolster Gadang
PETALING JAYA: Gadang Holdings Bhd’s near-term priority should be to reinforce cost optimisation efforts and enhance profit margins, analysts say.
To support a more sustainable earnings trajectory, a disciplined cost management strategy must be implemented in tandem with active participation in selective tender opportunities, TA Research said in a report.
The research house also remained cautious on Gadang’s job replenishment outlook.
As of end-May 2025, Gadang’s construction order book stood at RM839mil, representing 1.8 times construction revenue for the group’s financial year 2025, ended May 31 (FY25) .
Lower contract wins expected for Gadang
PETALING JAYA: TA Research has slashed its earnings forecasts for Gadang Holdings Bhd amid lower expectation of new contract wins.
In a note, the research house reduced the earnings estimates for the financial year 2025 (FY25) by 1.6%, followed by FY26 (26.7%) and FY27 (6.8%).
“Reflecting the absence of new job wins in FY25 and a slower-than-expected replenishment rate, we have revised our new job assumptions for FY26–FY27 lower from RM500mil to RM300mil per annum.”
Following the earnings revision, TA Research also cut its target price for the stock to 22 sen from 28 sen.
Given the negative risk reward profile, Gadang’s rating was also downgraded from “hold” to “sell” by TA Research.
On June 20, Gadang’s wholly-owned subsidiary, Gadang Engineering (M) Sdn Bhd, announced a RM92.5mil construction contract from AFA Construction and Engineering Sdn Bhd to expand the Kuala Lumpur-Karak Highway.
Gadang bags RM92.5mil contract to widen KL-Karak Highway
KUALA LUMPUR: Gadang Holdings Bhd’s wholly owned subsidiary, Gadang Engineering (M) Sdn Bhd, has secured a RM92.5mil contract to widen the Kuala Lumpur-Karak Highway.
In a filing with Bursa Malaysia, Gadang said it had accepted a letter of award from AFA Construction and Engineering Sdn Bhd to undertake earthworks and associated works for Package 2A of the Kuala Lumpur–Karak Highway widening project from KM39.00 to KM61.50.
The contract is for 18 months and is scheduled for completion in the fourth quarter of 2026.
Property segment remains Gadang’s growth driver
PETALING JAYA: Gadang Holdings Bhd’s property division is expected to remain a key contributor, driven by attractive sales incentives and an aggressive pricing strategy.
According to TA Research, the group’s construction order book stood at RM1bil as of end-November 2024, equivalent to 3.6 times its financial year 2024 (FY24) construction revenue, with unbilled property sales at RM329mil.
Following stronger-than-expected financial results for the first half of FY25 (1H25), TA Research revised its earnings estimates for FY25-FY27 upwards by 14.5%, 4.9% and 4.1%, respectively.
As a result, it raised its target price to 42 sen per share from 31 sen previously, upgrading its rating on the stock to “buy.”
Excluding a one-off gain of RM6.5mil, Gadang reported 1H25 core earnings of RM6.9mil – beating TA Research’s expectations.
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