GDB Holdings Bhd - Sarawak Flood Forecasting Win Lifts YTD Wins to RM795.3m
Tue, 20-Oct-2026 07:03 am
by Research Team • Apex Research

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GDB (0198)

Target Price (RM)

0.60

Recommendation

Buy

• GDB secured a RM119.0m sub-contract from I-Ilham Corporation for the National Flood Forecasting and Warning Programme (PRAB) Phase 3 in Sarawak, scheduled for completion by 29 November 2029.

• It is GDB's fourth Sarawak infrastructure win, lifting cumulative Sarawak construction value to RM355.9m and FY26 YTD wins to RM795.3m, or 79.5% of management's RM1.0bn target.

• The Group’s tender book now stands at c.RM4.3bn, comprising prospective projects spanning industrial, data centre, commercial, mixed-use, infrastructure, and residential sectors.

• Maintain BUY with an unchanged TP of RM0.60, based on 9.5x P/E applied to FY27F EPS of 6.3 sen.

 

Sub-contract award. GDB, through its wholly-owned subsidiary, GDB Infra Sdn Bhd, accepted a sub-contract from I-Ilham Corporation Sdn Bhd on 2 August 2026 for the construction and completion works of the Program Ramalan dan Amaran Banjir (PRAB) Fasa 3 Sarawak, for a subcontract sum of RM119.0m. The commencement date is effective from acceptance, with completion scheduled by 29 November 2029, a tenure of about 40 months. Disclosure was held back pending clearance from I-Ilham, which was obtained on 19 October. GDB intends to fund the works through internally generated funds and bank borrowings, and the contract has no impact on share capital or shareholdings.

Our View. We view the award positively. At RM119.0m, the contract is the largest of GDB's four Sarawak infrastructure contracts, ahead of the New Song Water Treatment Plant (RM115.5m). The win also deepens GDB's East Malaysia footprint, with Sarawak now accounting for RM355.9m, or 44.7%, of FY26 YTD wins of RM795.3m. Applying a conservative c.5-6% PAT margin, we estimate the contract could contribute c.RM6.0m-RM7.1m in cumulative PAT, or c.RM1.8m-RM2.1m a year over its c.40-month tenure, equivalent to c.2.8%-3.3% of our FY27F core net profit. A nationallevel flood forecasting programme further broadens the Group's credentials beyond roadworks and water treatment into climate resilience infrastructure, which should help it qualify for similar jobs. Execution is a consideration, as GDB will be delivering four early-stage Sarawak projects concurrently alongside its existing order book, which will test project management and working capital.

Outlook. With YTD wins of RM795.3m, GDB has achieved 79.5% of management's RM1.0bn FY26 orderbook replenishment target, leaving RM204.7m to be secured by year-end, which is less than 5% of its RM4.3bn tender book. Flood mitigation remains a public spending priority, with Budget 2027 naming three new flood mitigation projects, Kuching City, Sungai Golok Phase 2 and Sungai Kemaman, while 82 existing projects progress on schedule, alongside a development expenditure allocation of RM83bn for 2027 (2026: RM81bn). GDB's East Malaysia push, supported by the newly incorporated GDB Construction, should position it to capture more infrastructure-related tenders in Sarawak. Near term, the key tests are converting the tender book into wins in 4QFY26 and executing four early-stage Sarawak projects concurrently.

Earnings Revision. We make no changes to our earnings forecast as the award falls within our orderbook replenishment assumption of RM1.3bn for FY26.

Valuation & Recommendation. We maintain our BUY recommendation on GDB with an unchanged TP of RM0.60, based on 9.5x P/E applied to FY27F EPS of 6.3 sen, alongside a threestar ESG rating. We continue to like GDB for (i) its sizeable tenderbook of c.RM4.3bn, (ii) its expansion into Sarawak infrastructure works, and (iii) its diversification into property development.

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

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