GDB Holdings Bhd - Record 2QFY25 Profit; More Contract Wins Imminent
Tue, 26-Aug-2025 10:00 am
by Team Coverage • Apex Research

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GDB (0198)

Target Price (RM)

0.58

Recommendation

Buy

  • GDB’s 2QFY25 CNP came in at RM21.7m (+9.9% QoQ, +425.5% YoY), bringing 6MFY25 CNP to RM41.5m (+578.1% YoY). The results meet expectations, accounting for 48% of our forecasts. This is GDB’s strongest quarterly earnings since listing on Bursa Malaysia in 2018.

  • The Group declared a second interim dividend of 0.5 sen in 2QFY25, bringing 1HFY25 dividends to 1 sen.

  • 2QFY25 CNP improved QoQ and YoY due to increase in revenue driven by stronger progress on three major projects.

  • The Group’s orderbook remains healthy at RM1bn, providing revenue visibility until FY26.

  • The Group’s tenderbook stands at RM2.7bn, with RM2bn of additional bids planned for 2H 2025, potentially lifting tenderbook to c.RM5bn.

  • Maintain BUY recommendation with an unchanged TP of RM0.58, based on assigned 8.0x P/E multiple to its FY26F EPS of 7.2 sen, along with a three-star ESG rating.

 

Within Expectations. After adjusting for a RM0.02m gain on disposal of PPE, GDB’s 2QFY25 CNP came in at RM21.7m (+9.9% QoQ, +425.5% YoY), bringing 6MFY25 CNP to RM41.5m (+578.1% YoY), which accounts for 48% of our full-year estimates.

 

Dividend.The Group declared a second interim dividend of 0.5 sen in 2QFY25 (2QFY24: none), bringing 1HFY25 dividends to 1 sen (1HFY24: none).

 

YoY. 2QFY25 CNP surged 425.5%, in line with the 288% increase in revenue driven by stronger progress on three major projects, namely the Metrohub 4 in Klang, Logistics Hub Plot B in Shah Alam, and KL International Hospital in Bukit Jalil, as they enter their peak revenue recognition phases.

 

QoQ. CNP surged 9.9%, supported by a 23.9% increase in revenue, marking its strongest quarterly earnings since its listing on Bursa Malaysia in 2018. The improvement was driven by progressive revenue recognition from ongoing projects and catch-up profit recognition from older projects where cost savings were realised. PATMI margins normalised from c.14% to c.12% in 2QFY25, and we foresee them gradually returning to pre-COVID levels of c.9% as catch-up profits are being recognised.

 

Outlook. GDB’s orderbook remains healthy at RM1bn (3.8x FY24 revenue), supported by the three ongoing projects that will provide revenue visibility until FY26. Pursuing its growth agenda, the Group plans to submit RM2bn worth of bids by 2H 2025, with submissions concentrated in warehouse (44.7%), residential (16.6%), commercial (12.6%), and mixed-use (26.1%) projects. This would lift its current tenderbook of RM2.7bn to c.RM5bn, strengthening prospects for orderbook replenishment and sustained earnings growth. With an assumed 15% win rate for FY25F–FY26F, we expect annual new contract wins of RM705m, which should underpin order book replenishment and support medium-term earnings visibility.

 

Earnings Revision. Forecasts maintained, as results were within expectations.

 

Valuation and Recommendation. We maintain our BUY recommendation on GDB, with an unchanged TP of RM0.58 based on assigned 8.0x P/E multiple to its FY26F EPS of 7.2 sen, along with a three-star ESG rating. We remain positive on GDB’s outlook, driven by (i) three major projects in its RM1bn orderbook entering peak revenue recognition phases, (ii) potential new contract wins from a sizable tenderbook, expected to reach c.RM5bn by year-end; and (iii) long-term expansion plans into infrastructure construction services.

 

Risks. Rising material prices, failure to secure new contracts, and risk of Liquidated Ascertained Damages (LAD).

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