MRCB Is Moving Up - Still Room For More Higher

MRCB Is Moving Up - Still Room For More Higher

Economic Transformation Program Will Benefit MRCB

Economic Transformation Program will benefit MRCB so in short term MRCB share may likely to move higher from now. MRCB cover most of government project direct or indirectly so any news project roll out from government sure will effect MRCB share.

Due to RM vs USD getting higher the market support is good, however with RM value getting stronger compare USD but it weak again Gold, Gold price in RM is getting higher since 2H2010 and likely to hits RM130 per gram by end of this month.

MRCB 3Q09 surprises market

3Q09 surprises market

1. 3Q09 result exceeded market expectations, driven by construction earnings
2. New CEO promoted from within
3. Maintain BUY rating and RM1.80 TP (ex-rights).

3Q09 exceed market expectations. 3Q09 net profit was RM10m, bringing 9M09 net profit to RM22m. This was within our forecast but exceeded market expectations. 3Q09 earnings were driven by higher recognition of projects from its c.RM2bn construction orderbook such as EDL and Permai Hosptial in Johor. Construction margin was 5.5% vs 8.1% in 2Q09, but should normalize to 8-9% as EDL (13% completed) and KL Sentral construction projects (Lot A, 348, E and G) filter through. With no major launches in the pipeline (Lot D is scheduled for 2Q10), 3Q09 property earnings remained subdued at RM1m vs RM3m in 2Q09.

New CEO. MRCB has appointed Mohamed Razeek Hussain, aged 51, as CEO effective 1 December 2009. He is currently the COO of MRCB, which provides some assurance of his familiarity with the company. He has over 20 years experience in the property sector, having worked for Sime UEP, Land & General and E&O. Current CEO Shahril will be CIO of EPF but remain a director of MRCB.

Stronger newsflow. We expect strong newsflow for MRCB in the coming months, including (i) sale of Lot E comprising 5 office towers at a new benchmark price of RM1,200 psf or implied cap
rate of 6%, ( ii) chunky contract wins in 2010 related to LRT extensions and Bakun overland cables, and (iii) acquisition of valuable federal government land using proceeds from its
proposed rights issue.

Maintain BUY, RM1.80 TP. RM0.70 of our SOP value is supported by the KL Sentral franchise. The proposed rights issue is positive because it implies MRCB may be securing significant land deals and/or construction contracts. Besides the Jalan Ampang and Jalan Cochrane land, MRCB alluded to land banking of small and large pieces of land potentially in KL Sentral and adjoining its highways. The price of the 1-for-2 rights will be announced on 19 November.

MRCB Share Likely To Bounds Up In This Week

Base on the chart, share had been cumulative by someone so the share is ready to bounds up for someone to make big profit. Good news will be out anytime.

MRCB Is Forming A Bullish Pattern

Base on chart anaylisi MRCB is forming a bullish pattern to hits RM1.45 or more. This share may likely speculated to hits RM1.60 in short term. This few day they are a few share had been speculated till suspended by bursa may be MRCB also will be the one.

Target Price From HWangDBS 2H2009 Summery

Sime Darby (RM8.24; Fully Valued; Price Target: RM7.45; SIME MK)
Stronger 4QFY09

• 4QFY09 earnings were better than expected due to lower taxation, slightly stronger property margins, and lower borrowing cost
• CPO price could range between RM2,000 and RM2,200 in FY10F
• Maintain Fully Valued call and RM7.45 TP.

Axiata (RM3.11; Fully Valued; Price Target: RM 2.70 (Prev RM 2.35); AXIATA MK)
2Q09 core profit in line

• Annualized core 2Q09 net profit is in line with our FY09F profit, but below consensus
• We raised FY10F-11F earnings in anticipation of a turn around in its overseas operations
• Sum-of-parts price target is raised to RM2.70. But downgrade to Fully Valued on rich valuation.

Litrak (RM2.69; Hold; Price Target: RM2.70; LTK MK)
Limited upside

• 1QFY10 result was in line, with traffic volume growing 4% q-o-q
• Declared 10 sen interim DPS, double that for preceding year
• Downgrade to Hold, TP maintained at RM2.70.

KNM Group (RM0.77; Buy; Price Target: RM1.10; KNMG MK)
Expect stronger 2H09 earnings

• Weak 2Q09 result was within expectation
• Expect stronger 2H09 following recent contract wins
• Poised for new contract wins given stronger oil price.

MRCB (RM1.29; Buy; Price Target: RM1.50; MRC MK)
Stronger earnings ahead

• Strong 2Q09 result driven by higher construction contribution
• Expect earnings to improve following lower building material cost and improving property demand
• Maintain Buy and SOP-derived RM1.50 TP.

TRC Synergy (RM1.45; Buy; Price Target: RM2.05; TRC MK)
Still awaiting key catalyst

• 2Q09 result in line, margins improved
• Still missing key re-rating catalyst, Petro-Bru led Brunei refinery project
• Maintain Buy rating and RM2.05 TP.

Malaysia Airports (RM3.34; Buy; Price Target: RM4.50; MAHB MK)
2Q09 result within expectation

• 2Q09 core net profit was flat y-o-y at RM60.6m, in line with our expectation but below consensus’
• Positive impact from restructuring, strong passenger growth in LCCT, and improved rental contribution supported earnings
• Maintain Buy and SOP-based RM4.50 TP.

Eastern & Oriental (RM1.33; Buy; Price Target: RM2.10 (Prev RM 1.50); EAST MK)
In line, stronger sales ahead

• 1QFY10 result was in line, profit is expected to pick up with RM330m unbilled sales and RM2b upcoming launches
• Completion of rights issue by Oct09 will strengthen balance sheet and cashflows
• Maintain Buy, raised TP to RM2.10 based on 20% discount to RNAV of RM2.66 (fully diluted RM1.99)

Lafarge (RM6.30; Fully Valued; Price Target: RM5.10; LMC MK)
2Q09 in line, supported by higher ASP

• 2Q09 result was within our and consensus expectations
• Demand continues to fall 7% y-o-y, but should pick up in 2H09 along with a recovering economy
• As expected, LMC declared a single tier 15 sen DPS
• We retain our Fully Valued call as valuation remains expensive; RM5.10 TP is based on mid-cycle 9.8x PE.