At 10.22am, the counter increased by 20 sen to RM4.26 with 6.29 million shares changing hands.

Yesterday, Gamuda announced that its wholly-owned Australian subsidiary DR Infrastructure Pty Ltd had acquired the Downer Transport Projects (DTP) for an enterprise value of A$212 million (RM636 million).

According to MIDF Research, DTP is a division within the Downer Group which provides civil construction services in delivering transport projects, specialising in rail.

“Similar to Gamuda’s core capabilities in Malaysia, DTP is equally competent in track infrastructure, light rail, rail maintenance and road and bridge construction, among others, and its clients are mainly government customers,” it said in a note today.

The research house said the acquisition fits the bill of Gamuda’s long-term goal of strengthening its base in the country.

“The acquisition of DTP will catapult Gamuda’s progress in building up its local expertise as it will inherit 1,100 Australian talents spread across the country, besides providing the group with direct access into the Western Australia region where DTP is primarily based.

“As such, we have revised our target price (TP) for Gamuda to RM5.04 from RM4.67 as we roll forward our valuation period to financial year 2024 (FY24),” it added.

Meanwhile, in a separate note, CGS-CIMB Research views the deal as a strategic move for Gamuda as it provides an immediate RM6 billion enhancement from DTP’s existing order book of small and medium-scale projects to Gamuda’s current RM14.8 billion order book.

The acquisition also provides the group with access to other infra growth regions in Australia, as well as giving it an advantage in bidding for new larger-value transport infra contracts in the country.

“We estimate that on the guided 8% to 10% earnings before interest and taxes (Ebit) margin and RM3.6 billion FY23 revenue for DT Infrastructure, Gamuda’s FY24-25 net profit will rise by 25% to 29%,” it said, adding that it is maintaining the TP for Gamuda at RM4.69 per share.