Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation

Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Thursday, February 10, 2011

MRCB 4Q earnings surge 230pct to RM41.5m

KUALA LUMPUR: MALAYSIAN RESOURCES CORP [] Bhd’s earnings surged 230% to RM41.50 million for the fourth quarter ended Dec 31, 2010 from RM12.41 million a year ago, boosted by improved profit margin and property development projects.

The company said on Wednesday, Feb 9 revenue rose 53.7% to RM433.12 million from RM281.67 million. It proposed a dividend of 1.5 sen per share.

For the financial year ended Dec 31, 2010, its earnings jumped 94% to RM67.27 million from RM34.62 million. Revenue rose to RM1.967 billion from RM921.62 million.

Its cash and cash equivalents rose to RM487.27 million from RM232.57 million.

“The commendable result for the current quarter was mainly contributed by improved profit margin coupled with advanced stage of activities of its engineering and CONSTRUCTION [] ongoing works and property development projects at Kuala Lumpur Sentral,” it said.

MRCB said the higher operational margin was achieved on the back of crystallization of its ongoing value engineering and efficient project supervision and cost saving initiatives.

Commenting on the FY10 results, it said the higher revenue was contributed mainly from its construction and engineering division with ongoing work progress reaching maturity stage at relatively higher percentage of recognition compared to previous year.

The same impact was also contributed by the group’s ongoing property development projects at Kuala Lumpur Sentral.


MRCB (TP RM2.58 – TRADING BUY) FY10 Results Review: Back on The Fast Lane
MRCB’s FY10 net profit was 49% and 37% above our and consensus estimates, largely due to stronger earnings recognition from the E&C and property divisions, as well as improved margins. The better than expected results were also due to over-reacting on the part of analysts in cutting earnings estimates following its disappointing 9MFY10 results. We have raised our net profit forecast for FY11 by only 11% and introduce our FY12 forecast. As we are turning more optimistic on the property outlook for KL Sentral, we raise our land value assumption from RM1280psf to RM1640psf, which was based on the last transacted price in Jan 2008. Accordingly, we move up our RNAV fair value for MRCB from RM2.05 to RM2.58. With the sizeable upside, we upgrade our call from Neutral to Trading Buy at a TP of RM2.58. - OSK

HDBSVR raises MRCB TP to RM3.15
Written by Thursday, 10 February 2011 08:41
KUALA LUMPUR: Hwang DBS Vickers Research raised the target price for MALAYSIAN RESOURCES CORP [] Bhd (MRCB) to RM3.15 after its earnings were away above its and consensus expectations.

“BUY, raised TP of RM3.15. We continue to like MRCB as a strong 10MP and election proxy, and raised our TP to reflect the higher earnings. The strong 4Q10 result shows earnings delivery is improving and execution risk is well contained,” it said on Thursday, Feb 10.
HDBSVR said MRCB’s 4Q10 net profit of RM42 million (up 2.8 times on-quarter; and up 3.3 times on-year) takes FY10 net profit to RM67 million, “way above our and consensus expectations”.
This was largely due to a turnaround in CONSTRUCTION [] profits, which swung from a RM3 million loss in 3Q10 to RM39 million EBIT in 4Q10, as well as strong property billings largely from on-going works at Lot G.
HDBSVR raised FY11-FY12 EPS by 3%-12% after imputing larger new order wins of RM700 million to RM800 million versus RM600 million previously, while also taking into account timing of recognition of existing contracts which are largely on track.
“There is room to raise our forecasts further as we had not included some key projects such as Penang Sentral (RM2 billion GDV), Batu Feringghi (RM184 million GDV) and Kia Peng Condo (RM260 million GDV), and our assumed margins for both construction and property are conservative,” it said.

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