The ongoing mega projects, such as the ECRL, will continue, but the mass rail transit 3 has yet to be given the green light.
The ongoing mega projects, in particular the East Coast Rail Link will continue, which is the sector’s only near-term catalyst, but the mass rail transit 3 has yet to be given the green light.
Generally, upside risks to CY23 forecasts are quicker-than-expected ramp up of new projects and margin accretion from falling costs, it said. “The possible revised DE number could come in at about RM85bil, inclusive of US$3bil for 1MDB bond repayment,” it said.Going into 2023, given the consistent misses in actual DE disbursement over past few years, it said it is not too perturbed by the lower headline numbers but rather concerned on the implementation due to the late approval of Budget 2023 while changes to procurement process may slow job flows.
HLIB Research’s top picks for the sector are Gamuda Bhd and Sunway Construction Bhd due to their lower reliance on domestic public infrastructure spending.
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