Gamuda’s Premium Land Acquisition, Justified
RHB Investment Bank Bhd (RHB Research), MIDF Amanah Investment Bank Bhd (MIDF Research) and CIMB Investment Bank Bhd (CIMB Securities) have all maintained their BUY calls on Gamuda Bhd, with target prices of RM5.83, RM5.42 and RM5.50 respectively, following the group’s RM248.7 million land acquisition in Kuala Langat. Analysts believe the deal will enhance Gamuda Cove’s long-term value while improving the group’s property footprint in the southern Klang Valley.
RHB Research said the three parcels of land acquired by Gamuda span 336 acres and will serve as a strategic extension to the existing Gamuda Cove township, which still has 510 acres of unsold land and a remaining gross development value (GDV) of RM18.7 billion. The new land has an estimated GDV of RM2.2 billion, translating to an attractive cost-to-GDV ratio of 11.3% — well below the industry norm of 20%.
The research house viewed the deal positively, citing strong demand for Gamuda’s developments, including a 100% take-up rate for the first phase of “The Clove” at Gamuda Cove. The acquisition, fully funded via internal funds, is expected to raise Gamuda’s net gearing marginally from 39% to 40.5%.
MIDF Research also expressed confidence in the group’s strategic landbanking, noting that Gamuda Cove has consistently contributed a third of the company’s domestic property sales over the past three years. The new plots, which are leasehold with 74 years remaining, are adjacent to Paya Indah Discovery Wetlands and enhance connectivity to key surrounding towns such as Dengkil and Bandar Rimbayu.
MIDF Research highlighted that Gamuda’s construction segment remains underpinned by a record-high RM37 billion order book, and that the group’s balanced mix of townships and quick turnaround projects bodes well for future earnings.
Meanwhile, CIMB Securities noted that the RM17 per sq ft acquisition price represented a 42% premium over the original Gamuda Cove land purchased in 2014 at RM12 psf. However, it said the premium was justified given the completed placemaking and infrastructure around the area.
The research house also highlighted ongoing developments in Gamuda Cove’s commercial ecosystem, including the upcoming Asai Gamuda Cove Hotel (a JV with Dusit International), eco-resorts and family-centric attractions that are expected to drive visitor numbers and retail traffic.
CIMB Securities projected that Gamuda Cove alone could contribute RM810 million in property sales in FY25, equivalent to 14% of the group’s RM6 billion sales target.
Gamuda’s strategic expansion, coupled with innovative offerings like “Park Homes” and continued environmental rehabilitation efforts — such as the 90-acre Wetlands Arboretum — underscores its integrated approach to sustainable township development. The group’s total GDV has now increased by about 4% to RM64 billion, with analysts agreeing that its diversified geographic exposure and robust order book continue to make the stock an attractive proposition.
