No impact on Gamuda's Taiwan operations: RHB Research

KUALA LUMPUR: The recent earthquake in Hualien County, Eastern Taiwan, won't have an impact on Gamuda Bhd's operations there, according to RHB Research

The firm said that Gamuda's projects are situated at least 200 kilometers away from the epicentre, which is a considerable distance from Hualien County.

"As such, there was no major impact coming from the said earthquake, as the respective sites of Gamuda only felt a 4-4.5 magnitude on the Richter scale, which is considered to be a light earthquake that can be felt but generally causes no damage.

"There are no changes to our earnings estimates as we see no major adverse impact on Gamuda's operations at its work sites in Taiwan," it said.

As of the end of January, RHB Research observed that contracts in Taiwan constituted RM4.5 billion of Gamuda's RM24 billion outstanding order book, distributed among six contracts, making up 19 per cent of the total.

Among these contracts, the rail projects in Taiwan have completion rates of 1 per cent and below, indicating that major tasks like tunnelling may not have commenced yet.

"These rail projects include the Kaohsiung MRT, secured in October 2023 for MYR3 billion with an 88 per cent effective share, and the TaoYuan City Underground Railway project, secured in October 2022 for RM1.3 billion with a 60 per cent effective share.

"Other projects in Taiwan primarily involve structures such as sea wall reclamation and marine bridges, with completion rates ranging from 75 per cent to 90 per cent as of January," it said.

RHB Research has upheld its 'Buy' recommendation on Gamuda, setting a target price of RM6.30.

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