MIDF Amanah Investment Bank Bhd (MIDF Research) has reiterated its BUY recommendation for Gamuda Bhd, with a revised target price (TP) of RM5.42, reflecting the group's strong growth prospects, bolstered by an all-time high order book of RM31.8 billion and strategic land acquisition in Port Dickson (PD) for cloud and data centre (DC) infrastructure.

Gamuda, through its subsidiary Gamuda DC Infrastructure Sdn Bhd, has entered into an agreement to purchase 158ha of land within the Springhill Industrial Park, PD, for RM424.4 million. The acquisition from West Synergy Sdn Bhd — a joint venture between subsidiaries of MUI Properties Bhd and Chin Teck Plantations Bhd — is aimed at developing a high-tech digital infrastructure hub.

According to MIDF Research, the group plans to utilise the land for integrated developments combining cloud and data centre infrastructure. The acquired parcels, equipped with basic utilities and located 13km southwest of Seremban, align with Gamuda's strategy of delivering bundled solutions, including land, renewable energy, and water supply, leveraging its Digital Industrialised Building System (IBS) capabilities.

The land's estimated capacity to accommodate DC developments of up to 600MW could translate into a construction value of RM15 billion to RM18 billion. Management has expressed optimism about the growing pipeline of data centre projects, supported by the expansion of its Digital IBS facilities and dedicated construction teams.

Gamuda's order book remains robust, with a target of RM40 billion to RM45 billion by the end of 2025. MIDF Research highlighted upcoming projects such as the Penang LRT, a Sabah water supply scheme, and renewable energy contracts in Australia as potential catalysts. Despite an annual burn rate of RM12 billion to RM13 billion, these projects are expected to sustain its trajectory.

The research house adjusted its TP to RM5.42 from RM10.68, factoring in the recent one-for-one bonus issue. It pegged the group's financial year 2026 forecast earnings per share of 25.8 sen to a price-to-earnings ratio of 21 times, representing +2 standard deviations above its long-term mean.

MIDF Research remains positive on Gamuda's strategic initiatives, citing its track record of securing sizeable contracts, overseas expansion, and positioning as a frontrunner for mega projects. Gamuda continues to stand out as a preferred pick in the construction sector, with the acquisition marking another milestone in its differentiated offerings in the digital infrastructure space.