TRC (5054) : Public Invest Research Neutral on TRC Synergy
KUALA LUMPUR: Public Invest Research is maintaining its Neutral recommendation on construction-based TRC Synergy with a target price of 54 sen.
The research house said TRC was a good proxy to the Klang Valley Mass Rapid Transit (MRT) project and SCORE projects.
“But we believe until there’s stabilisation in the group’s earnings, we would prefer to take a conservative stance. That said, the property division might give the necessary earnings boost which could be the rerating catalyst in the near term,” it said.
Public Invest Research said in 3QFY14, TRC registered a slower than expected quarter, after recording only RM1.9mil (-66.1% on-year, -72.9% on-quarter) in net profit.
Year-to-date, the group’s net profit of RM10.6mil only constituted 62.4% and 63.1% of its and consensus estimates. The drop is revenue is attributable to slower billings.
“Earnings are kept unchanged as we believe the progress billing might pick up speed in the last quarter to match the profitability shown in Q2.
“Recap that the group secured two major jobs this year which include the Parliament House refurbishment (RM191mil) and KL EcoCity building packages (RM414.6mil),” it said.
Public Invest Research estimated TRC’s outstanding orderbook is estimated to be in excess of RM1.3bil which should underpin construction earnings for the next few years.
“That said, we are still wary of potential margin compressions from cost over-runs and possible delays due to recent site accidents,” it said.
TRC’s major mixed development in Ara Damansara has now been postponed to 1H2015, from end-2014 previously.
The 12-acre development has a combined gross development value in excess of RM1bil.
“This project will be competitively priced and given its proximity to the LRT station, we believe the project will be well received.
“A project nearby by See Hoy Chan, that is The Potpourri, was 70% sold during launch even though it was priced at RM800psf. We understand TRC is looking at average selling price of RM600psf. No change to our earnings as we have not factored in the contribution from Ara Damansara development,” said Public Invest Research.
http://www.thestar.com.my
KUALA LUMPUR: Public Invest Research is maintaining its Neutral recommendation on construction-based TRC Synergy with a target price of 54 sen.
The research house said TRC was a good proxy to the Klang Valley Mass Rapid Transit (MRT) project and SCORE projects.
“But we believe until there’s stabilisation in the group’s earnings, we would prefer to take a conservative stance. That said, the property division might give the necessary earnings boost which could be the rerating catalyst in the near term,” it said.
Public Invest Research said in 3QFY14, TRC registered a slower than expected quarter, after recording only RM1.9mil (-66.1% on-year, -72.9% on-quarter) in net profit.
Year-to-date, the group’s net profit of RM10.6mil only constituted 62.4% and 63.1% of its and consensus estimates. The drop is revenue is attributable to slower billings.
“Earnings are kept unchanged as we believe the progress billing might pick up speed in the last quarter to match the profitability shown in Q2.
“Recap that the group secured two major jobs this year which include the Parliament House refurbishment (RM191mil) and KL EcoCity building packages (RM414.6mil),” it said.
Public Invest Research estimated TRC’s outstanding orderbook is estimated to be in excess of RM1.3bil which should underpin construction earnings for the next few years.
“That said, we are still wary of potential margin compressions from cost over-runs and possible delays due to recent site accidents,” it said.
TRC’s major mixed development in Ara Damansara has now been postponed to 1H2015, from end-2014 previously.
The 12-acre development has a combined gross development value in excess of RM1bil.
“This project will be competitively priced and given its proximity to the LRT station, we believe the project will be well received.
“A project nearby by See Hoy Chan, that is The Potpourri, was 70% sold during launch even though it was priced at RM800psf. We understand TRC is looking at average selling price of RM600psf. No change to our earnings as we have not factored in the contribution from Ara Damansara development,” said Public Invest Research.
http://www.thestar.com.my
