Interior of a large modern server room.
Shares in Gamuda, the infrastructure company founded by Malaysian tycoon Lim Yoon Ling, surged to a record high after it announced an investment to help Google build digital infrastructure in one of Southeast Asia’s fastest-growing data center markets.
Earlier this week, the company’s subsidiary Gamuda Technologies formed a joint venture with Dagang NeXchange (DNEX) to provide Google decentralized cloud services in the country. At the same time, it agreed to acquire a 20% stake in Google digital services provider Cloud Space for 18 million ringgit ($4 million).
“Gamuda Technology’s latest expansion through a joint venture with DNEX and a stake in Cloud Space has brought Gamuda into the digital infrastructure space,” Teh Kian Yeong, an analyst at Kenanga Investment in Kuala Lumpur, wrote in a research note. “This new business will become Gamuda’s third core business.”
Gamuda shares rose 1.8% to an all-time closing high of RM9.77. Kenanga rates the stock outperform with a target price of RM10.80.
The company is building large-scale infrastructure projects such as large-scale rail transit systems in Australia, Malaysia and Taiwan, and has now become an important partner of Google. In May this year, it won a contract worth 1.74 billion ringgit to build a data center for the US tech giant at Sime Darby Property’s Elmina Business Park near Kuala Lumpur . As the race to expand cloud computing infrastructure heats up in Southeast Asia, Google and its rivals Amazon and Microsoft will invest billions of dollars in the coming years to expand their presence in the country.
Although Gamuda’s results on Thursday were not exciting, with net profit for the three months to October rising 5% year-on-year to RM205.4 million, despite a 47% jump in revenue to RM4.1 billion, Kenanga’s Mr Cheng The company’s profits are expected to be stronger going forward. The brokerage expects the company’s net profit to grow 46% to RM1.3 billion in the year ending July 2025 and reach RM1.7 billion the following year.
