MIDF upgrades Gamuda to 'buy'

MIDF Research has upgraded its call from 'neutral' to 'buy' on Gamuda Bhd, citing the latter's earnings growth potential.

It has also set a new target price of RM3.62 against RM3.20 previously.

In
a research note today, MIDF said Gamuda's net profit of RM132.3 million
in the first quarter of financial year 2012 was above its expectation.

"We
are raising our net profit forecast for 2012 and 2013 financial years
by 15 per cent and 14 per cent respectively, as the first quarter (2012)
results were above our expectation," it said.





Although Gamuda's revenue for the quarter declined by 21 per cent
quarter-on-quarter, its pre-tax profit jumped by 52 per cent
year-on-year and 11 per cent from the preceding quarter to RM167.2
million with strong contribution from the construction and property
divisions, said MIDF.

MIDF also believed that sales recognition
from the Double Tracking Project (Ipoh-Padang Besar) and domestic
property sales would likely drive Gamuda's earnings in the upcoming
quarters.
--Bernama