GDB Holdings Bhd - A new chapter in FY26
Tue, 03-Feb-2026 09:08 am
by Daryl Hon • Apex Research

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GDB (0198)

Target Price (RM)

0.48

Recommendation

Buy

  • GDB secured its maiden infrastructure contracts, totalling RM121.4m across two projects awarded by Bina Muhibbah Permajaya Construction Sdn Bhd, marking its entry into East Malaysia. 

  • Post job wins, GDB’s orderbook now stands at RM669m, providing the Group with earnings visibility through FY28. This translates into an orderbook-to-cover ratio of 2.6x FY24 revenue.

  • The Group has an estimated tenderbook of RM1.4bn, with a further RM1.4bn of planned bid submissions by Q1 2026, which could lift the tenderbook to c.RM3bn.

  • We lower our FY25–26F CNP forecasts by 4% and 9%, respectively, following the absence of new job wins in FY25, and revise our FY26F orderbook replenishment assumption down to RM550m (from RM705m).

  • Maintain our BUY recommendation with a lower TP of RM0.48 (from RM0.53 previously), based on 8.0x FY26F EPS of 6.0 sen.

 

First job wins of FY26. GDB secured its maiden infrastructure contracts, totalling RM121.4m across two projects awarded by Bina Muhibbah Permajaya Construction Sdn Bhd, marking its entry into East Malaysia. The first contract, valued at RM54.4m, involves road development works across the Simunjan and Samarahan districts. The second contract, worth RM67.0m, entails the construction of a new single-carriageway road, including earthworks, drainage and ground improvement works, across the Kuching and Samarahan Divisions.

 

Further details. Both projects commenced in January, with construction periods of 32 months for the first contract and 17.5 months for the second contract. We estimate GP margins of c.10% for both projects, below the 15–19% typically seen in residential and warehouse projects, reflecting their infrastructure nature.

 

Orderbook impact. We lower our FY26 orderbook replenishment assumption to RM550m (previously RM705m), reflecting slower job award momentum given a lack of new wins in FY25. These two recent job wins now represent c.22% of our revised FY26 orderbook replenishment assumption. Post job awards, the Group’s orderbook now stands at RM669m, providing the Group with earnings visibility through FY28. This translates into an orderbook-to-cover ratio of 2.6x FY24 revenue.

 

Infrastructure expansion materialises ahead of plan. While GDB’s entry into infrastructure was part of the Group’s longer-term strategy, the move has come earlier than expected. Historically focused on West Malaysia, the Group’s expansion into East Malaysia reflects management’s efforts to strengthen its orderbook through diversification. The Group has an estimated tenderbook of RM1.4bn, with a further RM1.4bn of planned bid submissions by Q1 2026 across the warehouse, hospital, residential, commercial and mixed-use segments, which could lift the tenderbook to c.RM3bn. Following the establishment of its infrastructure subsidiary, we expect a higher flow of infrastructure-related bid submissions going forward.

 

Earnings Revision. We lowered our FY25–26F CNP forecasts by 4% and 9%, respectively, due to the absence of new job wins in FY25 versus our earlier orderbook replenishment assumption of RM705m. As such, our FY26F replenishment assumption is also revised down to RM550m (from RM705m).

 

Valuation & Recommendation. Post-earnings revision, we maintain our BUY call with a lower TP of RM0.48 (from RM0.53 previously), based on 8.0x FY26F EPS of 6.0 sen, supported by a three-star ESG rating. Despite the slower-than-expected job award momentum, we remain positive on GDB’s prospects, underpinned by (i) three major projects in its RM669m orderbook entering peak revenue recognition phases, (ii) potential new contract wins from a sizeable tenderbook expected to reach c.RM3bn by Q1 2026, and (iii) earlier-than-expected expansion into infrastructure.

 

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

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