Company Name: GAMUDA BHD
|Research House: CIMB||Price Call: BUY||Target Price: 4.55|
Malaysiakini's report on a suit triggered by the alleged breach of agreement by the MMC-Gamuda JV on the double tracking project is a negative surprise. But we are not too alarmed at this juncture as the trial is still at the early stages. The worst-case scenario is a 29% dent on FY13 EPS and a 2% dip in RNAV. But we retain our forecasts and target price (10% RNAV discount) pending an outcome from the trial. Gamuda remains a Trading Buy and one of our top sector picks.