INVESTMENT HIGHLIGHTS
- Following a cabinet meeting last week, the government has decided to revive Bandar Malaysia, since its termination in May 2017
- The master development was reportedly valued at RM200b in GDV
- MRCB had previously signed MOU for Bandar Malaysia TOD
- The group is well positioned to undertake the project as transportation developer
- We maintain our BUY call with higher TP of RM1.05
Background on Bandar Malaysia. In earlier estimate, Bandar Malaysia was reportedly valued at RM200b in GDV and to be developed in a span of 25 years. The 486-acre development, which sits on the old Sungai Besi air force base, will house transit oriented development (“TOD”), global business hub and retail lifestyle destination. Accordingly, the whole development would potentially take place over 15-25 years.
MRCB previously signed MOU for Bandar Malaysia TOD. In January 2017, MRCB had entered into a non-binding MoU with Wondrous Vista Development Sdn Bhd and TRX City Sdn Bhd. The idea was to collaborate in developing an integrated transportation terminal at Bandar Malaysia which will house the terminus of the Kuala LumpurSingapore high-speed rail (HSR) line. Following Bandar Malaysia termination in May 2017, we believe the agreement should have lapsed as it was only valid for six months.
MRCB backed by solid track. Following the project’s revival, we think that it could potentially unmask meaningful catalyst for MRCB. Whilst details are still scarce, we believe opportunities are ample given the latest GDV estimation of RM140b. Positively, it was mentioned by the PM that bumiputera participation and the use of local content will be given priority throughout the project. On that note, we think MRCB is well positioned to participate in this project, adding to its track record in building PJ Sentral and KL Sentral as transportation developer.
Source: MIDF Research - 22 Apr 2019
https://klse.i3investor.com/blogs/midfresearch/203354.jsp
