Gamuda (GAM MK, BUY, FV RM4.58, Last Close: RM3.59)

To get  a first-hand look at the  RM50bn KV MRT - the Malaysian Government’s largest ever infrastructure project - we  dropped in at  one of the 5 KV MRT Information Centres in town, and took a  bus  to trace the journey from  Sungai Buloh to Semantan, which is part of  the Sungai Buloh-Kajang (SBK) line. We are positive on the  potential  rollout  of the project and see the award of  contracts accelerate  in the coming months, with MMC-Gamuda  assuming the  role as the caretaker of this line’s  elevated portion. Maintain BUY on  Gamuda, at  an unchanged FV of RM4.58, based on our SOP-based valuation.

A well-attended event. The visit-cum-tour, hosted by MMC, was fairly well-attended by some 20-30 participants comprising  fund managers and  buy-side analysts, including ourselves. We started with a visit to the information centre in TTDI Plaza in Taman Tun Dr Ismail. To kickstart the event, MMC Director of Projects En Maslan Othman gave a 1-hour presentation on the  Klang Valley My Rapid Transit (KV MRT) project as well as provided an update on the SBK line’s progress. Later, we got on a bus which took us to Sungai Buloh, which is the first stop  along  the SBK line. From Sungai Buloh, we followed the proposed alignment of the SBK line up to the Semantan station before calling it a day. Some of the key findings are as follows.

Depots in RRIM and Saujana Impian. The entire SBK line running from Sungai Buloh to Kajang is 51km long, of which 41.5km is elevated and 9.5km underground. There are 31 stations in total, comprising 24 elevated ones  and 7 underground stations. While these details are not exactly new, we found out that there will be 2 depots – each with a parking capacity of up to 60 trains – one of which will be  situated in Rubber Research Institute Malaysia’s (RRIM) existing site in Sungai Buloh and the other in Saujana Impian in Kajang.

Train specifications. Operating on a 4-car train with a capacity of 300 pax per car at an average speed of 36km/hour, the SBK line will provide effective train services to 1.2m passengers, with an estimated daily ridership of over 400k. We understand that the MRT  service will commence at 6am daily  up to midnight. With an average 1km-1.5km between stations, the average waiting time will be at most 2 minutes when the system begins operations and at less than a minute by 2050.

Completion in phases. MMC said the SBK line will be completed in 2 phases, with the Sungai Buloh-Semantan section likely to commence operation by Dec 2016, while the remaining Semantan-Kajang portion will be completed by mid-2017. To ensure interconnectivity with other train systems,  a number of interchange stations have been identified. For instance, the proposed MRT station in Sungai Buloh will be sitting on top of the existing Keretapi Tanah Melayu (KTM) station at Sungai Buloh.

Source: OSK188