· GDB’s 1HFY26 core net profit of RM34.6m (-16.6% YoY) accounted for 48% of our FY26F forecast of RM71.6m, which is in line with our expectation.
· GDB’s orderbook now stands at c.RM1.0bn, providing earnings visibility until FY30.
· We remain positive on GDB’s earnings into 2HFY26, underpinned by the Group’s current tenderbook of c.RM9.6bn, with RM9.2bn of additional bids planned for 2HFY26.
· We maintain our FY26F/FY27F/FY28F core net profit forecasts of RM71.6m/RM64.5m/RM58.7m.
· Maintain BUY recommendation with an unchanged TP of RM0.60, based on a P/E multiple of 9.5x applied to FY27F EPS of 6.3 sen.
Results Inline. GDB reported 2QFY26 core net profit of RM13.1m (-38.8% QoQ, -39.5% YoY), after adjusting for gain on disposal of property, plant and equipment (RM0.055m.). This brought 1HFY26 core net profit to RM34.6m (-16.6% YoY). This brought 1HFY26 core net profit to RM34.6m (-16.6% YoY), accounting for 48% of our FY26F forecast and broadly in line with our expectations, underpinned by resilient earnings contribution from ongoing projects nearing completion.
QoQ. Core net profit fell 38.8% QoQ to RM13.1m (1QFY26: RM21.5m) due to lower revenue recognition in 2QFY26, where revenue declined 15.7% QoQ to RM142.5m, as construction activities progressed in line with the scheduled work programmes for the KL International Hospital, Logistic Hub Plot B and Metrohub 4 projects, all of which are nearing completion.
YoY. 2QFY26 revenue fell 21.2% YoY to RM142.5m as the KL International Hospital, Logistic Hub Plot B and Metrohub 4 Logistic Hub projects moved past their peak billing stages. Core net profit declined 39.5% YoY to RM13.1m (2QFY25: RM21.7m), on lower revenue recognition and a near-doubling of administrative expenses to RM6.2m (2QFY25: RM3.2m) as the Group expanded its organisational structure to support its move into East Malaysia, alongside diversification into new business lines.
YTD. 1HFY26 revenue fell 4.7% YoY to RM311.4m, as the wind-down of legacy projects outweighed contributions from newer works. Core net profit fell 16.6% YoY to RM34.6m after adjusting for a RM0.12m disposal gain on property, plant and equipment.
Outlook. GDB’s orderbook now stands at c.RM1.0bn, with its ongoing projects expected to provide earnings visibility through FY30. Meanwhile, its tenderbook remains healthy at c.RM9.6bn, with the Group preparing c.RM9.22bn worth of bids for submission by end of 2026, spanning infrastructure works (roads, bridges, data centres) as well as commercial, residential and warehouse projects. As such, we maintain our annual orderbook replenishment assumption of RM1.3bn for FY26F. GDB also continues to diversify beyond core construction, via its expansion into property development in Sarawak, two parcels of land for a proposed mixed-use project with an estimated GDV of c.RM500m, and the incorporation of GDB Resources Sdn Bhd to trade in and supply construction materials, equipment and hardware, a step towards vertical integration of its supply chain. We continue to expect Malaysia's construction sector to benefit from sustained government infrastructure spending, ongoing high-rise and mixed-use development in the Klang Valley, and rising demand for data centre.
Earnings Revision. We maintain our FY26F/FY27F/FY28F core net profit forecasts of RM71.6m/RM64.5m/RM58.7m, with no changes to our earnings assumptions.
Valuation and Recommendation. We maintain our BUY recommendation with an unchanged TP of RM0.60, based on a P/E multiple of 9.5x applied to FY27F EPS of 6.3 sen. We remain positive on GDB’s prospects, underpinned by (i) its RM1.0bn orderbook providing earnings visibility until FY30, (ii) a sizeable tenderbook expected to reach c.RM18.8bn by 2HFY26, and (iii) its latest venture into infrastructure and property development.
Risks. Rising material prices, failure to secure new contracts and risk of Liquidated Ascertained Damages (LAD).
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.028078 | 4.060496 |
| EUR | 4.729360 | 4.738927 |
| CNY | 0.601158 | 0.601778 |
| HKD | 0.513500 | 0.517628 |
| SGD | 3.169857 | 3.195407 |