MRCB (1651) : MRCB continues to be on CIMB Research Add list
KUALA LUMPUR: CIMB Equities Research is retaining its Add recommendation for Malaysian Resources Corp Bhd (MRCB) with a target price of RM2.08, which is an upside of 39.6% from the last traded price of RM1.49.
“The group's longer-term prospects in the property segment are backed by over RM30bil in outstanding gross development value (GDV). Maintain Add. Jobs wins are medium-term catalysts,” it said on Wednesday.
The research house said MRCB's annualised 9M14 core net profit made up 92% of its full-year forecast and 89% of consensus. The results were broadly in line as it expected the fourth quarter to show strong property numbers.
“Management sounded more optimistic on order flows, while confirming the RM800mil incinerator project tender as a new prospect. EPS forecasts are maintained.
“Our target price is intact (still pegged to a 20% RNAV discount), as the effect of rolling over to end-2015 is offset by the update of balance sheet items,” it said.
CIMB Research said Tuesday's RM141mil domestic contract win adds on to the increasing visibility of new jobs.
Commenting on the financial results for the nine months ended Spet 30, 2014, it said annualised core net profit made up 92% of its full-year forecast and 89% of consensus.
The performance was broadly in line, with the company expected to report strong property earnings in 4Q as PJ Sentral’s contribution picks up.
“Core construction EBIT margin of 4-5% is intact as 9M14 construction EBIT margin of 14% is not sustainable and was boosted by substantial gains from DUKE disposal and write back of LAD provisions. The absence of dividends was expected,” it said.
MRCB announced that it secured a building contract worth RM141mil from
Desaru Peace Holdings.
CIMB Research said this supports its earlier guidance of being increasingly active in tenders over the past few months.
It added that MRCB’s management confirmed that it was tendering for a construction/concession-type incinerator project reportedly to be worth RM800mil – a potential maiden renewable energy (RE) venture. We maintain our RM500mil per annum new jobs assumption for now.
“The stock is down 18% from its 52-week high of RM1.79, largely due to the overhang from the property cooling measures and lack of job flows.
“However, MRCB's appeal over the next few months is likely to gravitate to construction, while its longer-term property development prospects are anchored by PJ Sentral and Kwasa Damansara's MX-1 worth RM31.4bil in total incoming GDV,” it said. - The Star
KUALA LUMPUR: CIMB Equities Research is retaining its Add recommendation for Malaysian Resources Corp Bhd (MRCB) with a target price of RM2.08, which is an upside of 39.6% from the last traded price of RM1.49.
“The group's longer-term prospects in the property segment are backed by over RM30bil in outstanding gross development value (GDV). Maintain Add. Jobs wins are medium-term catalysts,” it said on Wednesday.
The research house said MRCB's annualised 9M14 core net profit made up 92% of its full-year forecast and 89% of consensus. The results were broadly in line as it expected the fourth quarter to show strong property numbers.
“Management sounded more optimistic on order flows, while confirming the RM800mil incinerator project tender as a new prospect. EPS forecasts are maintained.
“Our target price is intact (still pegged to a 20% RNAV discount), as the effect of rolling over to end-2015 is offset by the update of balance sheet items,” it said.
CIMB Research said Tuesday's RM141mil domestic contract win adds on to the increasing visibility of new jobs.
Commenting on the financial results for the nine months ended Spet 30, 2014, it said annualised core net profit made up 92% of its full-year forecast and 89% of consensus.
The performance was broadly in line, with the company expected to report strong property earnings in 4Q as PJ Sentral’s contribution picks up.
“Core construction EBIT margin of 4-5% is intact as 9M14 construction EBIT margin of 14% is not sustainable and was boosted by substantial gains from DUKE disposal and write back of LAD provisions. The absence of dividends was expected,” it said.
MRCB announced that it secured a building contract worth RM141mil from
Desaru Peace Holdings.
CIMB Research said this supports its earlier guidance of being increasingly active in tenders over the past few months.
It added that MRCB’s management confirmed that it was tendering for a construction/concession-type incinerator project reportedly to be worth RM800mil – a potential maiden renewable energy (RE) venture. We maintain our RM500mil per annum new jobs assumption for now.
“The stock is down 18% from its 52-week high of RM1.79, largely due to the overhang from the property cooling measures and lack of job flows.
“However, MRCB's appeal over the next few months is likely to gravitate to construction, while its longer-term property development prospects are anchored by PJ Sentral and Kwasa Damansara's MX-1 worth RM31.4bil in total incoming GDV,” it said. - The Star
