$GDB : Mega projects + data center?*
Sharing from WA group. ;) gone up today
馃搶 _*From The Edge:*_
1. GDB is close to securing a *sizable contract* from a Singapore REIT manager to build a warehouse in Shah Alam.
2. GDB has a good chance to secure *another 2-3 major contracts* this year, conservatively estimated, carrying RM500-600mil each.
馃搶 *Major projects to kick in soon?*
1. GDB's current order book stands at RM398mil, with only 2 projects on hand (logistic hub in Klang and hospital in Bukit Jalil)
2. In FY23, its order book fell below RM1bil for the first time since 2019 following the termination of Conlay project worth RM1.25bil.
3. Based on the news from The Edge, GDB is likely to secure RM1-2bil of projects in FY24, its share price climbed to the highest @ RM0.685 in Jan 2021, 3 months after securing Conlay project in Oct 2020. Its order book as at end of FY20 stood at RM2bil.
馃搶 *What caused the drop since early 2021 other than the Conlay issue?*
As we know, construction sectors faced headwind in 2021-2022 given the:
1. increased construction material prices
2. labour shortages leads to higher labour costs
3. higher Covid compliance cost and delay in project during Covid period
Hence, we may see a turnaround moving forward given the *normalisation of margin* for its new projects as they have to take into account the current building material cost in their contract.
Notably, GDB was the *winner of Highest ROE over 3 Years for the construction sector* for the FY2020-FY2022 evaluation period, despite a 10% decline of ROE in FY22 due to the abovementioned issues.
馃搶 GDB also has a good track record in *construction iconic buildings* ie. Menara Hap Seng 3, Menara Etiqa.
馃搶 GDB has *zero borrowings*!
馃搶 GDB current has submitted tender of RM1.7bil and planning submit another RM4.8bil by 1HFY24. From its QR report in 3QFY23, GDB mentioned that they're bidding for the *construction of data center* as well. The winning of data center project may provide further upside to GDB.
$GDB / 0198 (GDB HOLDINGS BERHAD)