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Gamuda’s IBS capabilities to help it secure data centre jobs in Klang Valley

Gamuda’s IBS capabilities to help it secure data centre jobs in Klang Valley

13 Feb 2024

RHB Research believes Gamuda Bhd industrial building system (IBS) capabilities may position the group to capture data centre opportunities within the Klang Valley.

It expects Tenaga Nasional Bhd’s Green Lane Pathway, to facilitate a smoother and faster setup of data centres in the country.

Gamuda’s IBS plants are in Banting and Sepang, Selangor.

“Together, these plants have a combined maximum production capacity of approximately 10,000 residential units per year.”In terms of efficiency, Gamuda’s IBS capabilities allow for a 50 per cent reduction in construction time for high-rise buildings and approximately 20 per cent for landed properties,” it added.

The bank expects Gamuda’s residential projects and involvement in data centres to bring it a pre-cast order book of RM300 million by the end of fiscal year 2023 (FY23).

“Despite the relatively small share of IBS job orders, accounting for only 1.5 per cent of the order book by the end of FY23, we have learnt that Gamuda is exploring opportunities for data centre projects in the Klang Valley.

“If these data centre projects expand significantly, we believe Gamuda can effectively utilise both factories to meet the demand for such orders,” it added.

According to the Construction Industry Development Board (CIDB), Gamuda was awarded a contract worth RM170 million by AIMS Data Centre to construct a data centre in Cyberjaya in February 2023, with a target completion by the end of the calendar year 2023 (CY23).

“While CIDB did not provide specific details, it is speculated that the data centre in question could be the 8MW AIMS Cyberjaya Block 2 data centre, for which Gamuda employed its “Next-Gen Digital IBS” solutions.

“In terms of profitability, projects of this nature could yield pre-tax margins ranging between 10 to 12 per cent, in our assessment,” said RHB Research.

RHB Research has upheld its ‘Buy’ recommendation for Gamuda, maintaining unchanged earnings estimates while raising the target price for Gamuda Bhd to RM6.46 from RM5.66.

Source: NST