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.

Read more...

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 theedgemalaysia.com 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.

Buy Malaysian Resources: HwangDBS

One of the best news for Malaysian Resources Corp Bhd (MRCB)is the RM1.2 billion Lot D project that had received approval from the Ministry of Housing for completion in 48 months vs the mandated 36 months, says HwangDBS.

"This means a possible launch in mid-2011 to diversify MRCB’s earnings away from construction, which dominated financial year 2009- 2010 forward earnings (50-75 per cent of EBIT)," adds HwangDBS.

HwangDBS expects the take-up to be strong with at RM1,000-RM1,200 per square feet, which is a discount to the adjacent St Regis.

"This will also coincide with the launch of its strata offices at Lot B (RM1.2 billion in gross development value). About 30 per cent has been sold to committed buyers," HwangDBS said

HwangDBS, however understands that there is no firm commitment for a mass rapid trnsport (MRT) station at KL Sentral, but possibly one at the Museum nearby.

Given the strengthening KL Sentral franchise, Rubber Research Institure Malaysia (RRIM) land project and its robust contract flows in 2011. HwangDBS recommends MRCB a 'buy' with target price of RM3.05 (with a 41 per cent upside). - Reuters

Read more: Buy Malaysian Resources: HwangDBS

Building up to a super bull run

A super bull run is on the horizon for Malaysian construction stocks next year on optimism that the RM40 billion Mass Rapid Transit project will start in July.

The bullish outlook is also backed by new government initiatives such as the Economic Transformation Programme and the 10th Malaysia Plan, said UOB KayHian head of research Vincent Khoo.

Research houses are maintaining their overweight call on the sector.

"We expect a bull run next year," Khoo told Business Times.

An analyst from TA Research said the stock market needs news like the MRT as a catalyst for construction stocks to sustain its upbeat momentum.

He said judging from the size of the MRT project, it is certain that almost all local construction companies will benefit.

"If the government divides the project evenly, then each company could get contracts worth RM500 million to RM1 billion. This augurs well for the sector," he said.

The MRT, comprising three lines, is the largest infrastructure project in Malaysia's history. The last project announced was the RM12.5 billion double tracks.

Analysts said the first of the three MRT lines, joining Sungai Buloh and Kajang, running through Kuala Lumpur City Centre, is estimated at RM14 billion. The line will cover 60km and have 35 stations.

They said MMC-Gamuda Joint Venture Sdn Bhd may get the tunneling portion from Sungai Buloh to Kajang, worth RM6 billion to RM8 billion.

Master Builders Association Malaysia president Kwan Foh Kwai expects companies like Sunway Construction, IJM Construction, Muhibbah Engineering, Bina Puri, Loh & Loh, MRCB Engineering, UEM Builders, WCT, Ranhill and Ahmad Zaki to bid for the MRT.

Others include Eversendai Corp, Crest Builders, Putra Perdana Construction and MTD ACPI.

Ahmad Zaki managing director Datuk Wan Zakariah Muda said the MRT news is positive for the sector. "There will be spillovers and knock-on effects. We plan to participate in the MRT," he said.

An official from Putra Perdana Construction Sdn Bhd said it will eye packages to build structures, stations, bridges and tunnel lining work.

Read more

3.65 and 2.30

Taken from Malaysia-Finance Blog

Blogger Buyer said...

Hi S.Dali,

IJMLand will resume trading tomorrow, and since the rm3.65 is fixed, what is the expectation under this condition?? will it be only trading around 3.6 range?
Pls advise
Thanx in advance

5:19 PM

buyer,

thats a loaded question which plenty of ppl will pay good money to know ...lol ; )

if its a straight out G.O. ... then it should trade slightly below 3.65, maybe 3.60 because many ppl will give a bit discount so that they don't have to wait n go thru the exercise.. but in a G.O. there is an end buyer willing to pay at a fixed price

this is a swap exercise, and unlike the uemland sunrise deal, it will be swapped into a newco... one will notice that ijmland valuation has a higher premium than mrcb, which is fair considering mrcb's higher PB

does it mean that ijmland will go to 3.65??? well, maybe ... its not as straight forward .... as u can see, what if both parties just pull a figure from thin air and say ijmland swap at 5.00 and mrcb swap at 4.00, does that mean both will still go to those levels? its a swap, which means u will get something for the swap, in this case u get shares in the newco which will be listed as well

the key IS will everybody clamour to have shares in the newco ... if the swap was at 5.00 for ijmland, even krishnan tan won't want the shares in the newco, and will sell even at 4.80 or 4.50 or even 4.00 ... hence the key is whether ppl want to own shares in the newco

collectively, the newco will have a pb of around 2.1x, which is highly acceptable ... the merged entity will be a force to be reckoned with, and this merger basically confirms that the newco will get the mega Sg Buloh project, which will underpin strong interest, plus the newco will have very good liquidity, hence the controlling stakeholders and substantial shareholders will be silly to just offload shares at 2.30 and 3.65 for MRCB and IJMLAND respectively as that will mean they will get zero shares in the newco ... EPF won't sell, IJM Corp won't sell and definitely Krishnan Tan won't sell because they all know after the exercise, the newco will move even higher

if anything, the stakeholders will want to own more shares plus the merged entity is really a 1+1=3 just like uemland-sunrise

methinks both ijm land and mrcb will trade around 3.50 and 2.25 for the first hour to digests the traders and contra players .... before moving to 3.65 and 2.30, and then surge past those levels in a day or two ... because seriously, none of the stakeholders will be selling, they want shares in the newco .. you add in institutions and foreign funds into the fray who want to own a key property vehicle ... there are a lot more buyers out there than genuine sellers

PS. Dali, if you disagree this appears here for my record let me know - I'll then delete immediately.

Price Target News for MRCB

Price Target date: 04/11/2010 | Source: HWANGDBS

KUALA LUMPUR: Shares of MALAYSIAN RESOURCES CORP [] Bhd rose in active trade in late afternoon on Thursday, Nov 4 after it was recently upgraded by a local research house due to MRCB's strong proxy to the 10th Malaysia Plan (10MP).

At 3.21pm, MRCB was up 10 sen to RM2.17. There were 10.9 million shares done.

The FBM KLCI was up 1.87 points to 1,509.47. Turnover was 858.37 million shares done valued at RM1.01 billion. There were 371 gainers, 356 losers and 305 stocks unchanged.

Hwang DBS Vickers Research (HDBSVR) said MRCB strong proxy to 10MP projects and raised its target price to RM2.90.

'We raised FY11-FY12F earnings by 13-27% after imputing larger new contract wins of RM600m p.a (vs RM400 million to RM600 million previously), and the launch of Lot D in 2H 2011 (GDV RM1.2 billion; average selling price RM900-RM1200 psf, JV with CapitaLand and Quill),' it said.

HDBSVR said it raised TP to RM2.90, also accounting for (i) higher RM1,200 psf ASP for the remaining 12 acres of land in KL Sentral premised on a scarcity premium for the strong maturing franchise. The last benchmark for office was Lot G at more than RM1,000 psf, similar for recent strata units for Lot B; (ii) higher values for its concessions, EDL and Duke, and (iii) inclusion of building services business at 10x CY11 PE.

HDBSVR said pending a formal participation in the Rubber Research Institute Malaysia (RRIM) land, MRCB seems set to capitalise on more 10MP projects, which carry stronger emphasis on environmental projects.

With the mass rapid transit (MRT) closer to receiving Cabinet approval, MRCB's fortune is even brighter with the red and green line converging at RRIM.

'It will benefit from: (i) better pricing power over our RM300 psf assumption. Every RM100 psf increase will raise our SOP by 7%, and (ii) it will likely receive a sizable portion of MRT CONSTRUCTION [] works for the portion leading to the RRIM land. Another wildcard could be MRCB's involvement in the redevelopment of Pudu Jail given its prior work for Gaya Bangsar condominium,' said the research house.

Govt may speed up rollout of mega projects

By IZWAN IDRIS izwan@thestar.com.my

This is to keep growth intact amid shaky global recovery

PETALING JAYA: A shaky global economic recovery may prompt the Government to speed up the rollout of big construction projects at home to keep domestic growth intact.

Mega projects that grabbed the headlines recently include the RM36bil mass rapid transit (MRT) project jointly proposed by Gamuda Bhd and MMC Corp Bhd, the RM7bil light rail transit (LRT) extension programme and the redevelopment of land belonging to the Federal Government.

The bulk of these potential contract awards are expected to go to the bigger players. The awards, if they materialise soon, would be a major boost for the sector.

“While we believe the market is fully aware that certain negative elements are still lingering in the sector, we feel that it is likely to ‘brave’ these negative elements and forge ahead of the curve, underpinned by the collective ‘buy-first-on-news’ mentality,” RHB Research Institute said in a note yesterday.

These so-called negative elements include slow pace of public project awards and the 23% cut in actual project development spending under the 10th Malaysian Plan as compared to the Ninth Malaysia Plan.

RHB Research yesterday upgraded the construction sector to overweight from neutral previously, buoyed by positive newsflow. It listed Gamuda Bhd as its top “tactical” pick, while Sunway Holdings Bhd ranked the highest on its “value” list.

Previous reports indicated that the MRT project might start as soon as early next year, while works to extend the LRT lines would commence by the end of the year.

There is yet to be a formal award of the proposed MRT project, or clear indication that the huge project would even take off soon despite being identified for implementation under the 10th Malaysia Plan.

OSK Research predicted the value of local contracts to be dished out this year to “easily surpass” the total RM10bil recorded in 2009.

The figure excludes potential award of LRT or MRT-related jobs, according to analyst Jeremy Goh who covers the sector at OSK Research.

The firm has a “neutral” view on the construction sector, largely because of unattractive valuations and “lack of significant re-rating” catalyst happening soon.

Shares in Gamuda had risen 22% year-to-date at yesterday’s close of RM3.15, while rival IJM Corp Bhd was up 10% at RM4.93. Construction and property player Malaysian Resources Corp Bhd (MRCB) closed at RM1.52 yesterday, up 22% year-to-date.

MRCB has been linked to the project to develop the Government land in Sungai Buloh, Selangor, although there has been no official award to the company so far.

RHB Research said the market was likely to react positively to the announcement of formal awards of Federal land parcels to “master developers” and the subsequent farming out of the sub-divided smaller land parcels to various developers.

“Given the scale of the projects and that most construction boys are already involved in property business, they are likely to get a slice of the action,” the firm said.

Source ...

15 firms attend SPNB tender briefing for LRT job

STATE-owned public transport operator Syarikat Prasarana Negara Bhd (SPNB) had called for a tender briefing yesterday for the light rail transit (LRT) line extension in the Klang Valley.

It is understood the briefing was attended by 15 construction companies to discuss the scope of works involved in the LRT extension project estimated at about RM9 billion.

SPNB invited the companies.

They include Sunway Construction Sdn Bhd, IJM Construction Sdn Bhd, Muhibbah Engineering Sdn Bhd, Gamuda Bhd, Bina Puri Holdings Bhd, Loh & Loh Corp Bhd, MRCB Engineering Sdn Bhd as well as joint-ventures such as WCT-Sinohydro, Ranhill-CCCC and UEM Builders-Intria Bina.

It is understood that the companies are expected to visit the site this Sunday, where the lines between Ampang and Kelana Jaya are to be built.

"The companies must buy the tender documents for the project by June 24. SPNB may call for tenders for infrastructure works first," a source told Business Times.

It is learnt that there will be a total of eight packages under the project, which will be tendered in stages.

These include the construction and completion of facilities work for the Ampang LRT line, and the Kelana Jaya LRT line.

The other packages are to nominate sub-contractors for fabrication and delivery of segmental box girders for both the Ampang and Kelana Jaya LRT lines.

SPNB group managing director Datuk Idrose Mohamed had recently said that 15 candidates were shortlisted for the sub-contracting of fabrication and delivery of segmental box girder works.

SPNB is raising RM4 billion from bond sales to part-finance the project, which forms part of the RM10 billion railway scheme to expand Kuala Lumpur's public transport network.

Source ...

Construction, Property And Utilities Stocks To Benefit From 10MP Announcement

KUALA LUMPUR, June 11 (Bernama) -- The equity market is expected to react positively to the unveiling of the 10th Malaysia Plan (10MP) (2011-2015).Construction, property and utilities-related stocks are expected to reap the immediate benefits from the announcement of 52 high impact projects worth RM63 billion under the 10MP yesterday, says research houses. The projects include seven toll highways, two coal power plants and the development of 1335 hectares (3,300 acres) of land in Sungai Buloh.

Also announced was the development of the Sungai Besi airport land in Kuala Lumpur and the KL International Financial District as well as the LNG regasification plant in Melaka.

OSK Research said construction and property would naturally feel the greatest impact from these projects, with the potential beneficiaries being Sarawakian construction players.

Agreeing with this, MIDF Research said it had identified Naim Holdings and Hock Seng Lee as shorter term benefeciaries of the budget.

Malaysian Resources Corporation Bhd (MRCB) is also expected to participate in the various rail projects.

"As for property, while noting that land value could be unlocked with the development of Sungai Buloh, Sungai Besi airport and Kampung Baru, we are concerned that existing commercial property values could be capped if the launch of these new developments is not properly planned," OSK said.

The utilities sector will benefit from plans for a LNG plant and new coal power plants coupled while planned subsidy reductions should help assuage concerns of a looming power crunch.

Another research house, Kenanga Research meanwhile, said contractors with a strong balance sheet would be able to bid more competitively with deferred payment contracts, lower construction cost through buying materials using cash and lower interest rates.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) yesterday, stayed in positive territory throughout the day and finished 1.23 points higher at 1,291.31.

The market though, did not react much to the unveiling of the five-year plan as it fell within market expectation.

"The unveiling of the 10MP did not come with surprises as rumours have preceded the event while plans as well as the broad themes were unveiled earlier.

"Rather, more details were unveiled, such as the estimated cost of a number of public-private partnerships (PPP) projects and confirmation of certain land development rumours," OSK said.

-- BERNAMA

SunCon, WCT, Fajar, Muhibbbah pre-qualified as main contractors for LRT extensions

Written by Joseph Chin Wednesday, 28 April 2010 11:35

KUALA LUMPUR: Syarikat Prasarana Negara says 17 applicants have been pre-qualified as main contractors for the extensions to the light rail transits for the Ampang and Kelana Jaya lines.

It said on Wednesday, April 28 the applicants have demonstrated their technical and financial capacity and capability with the relevant infrastructure works experience.

They are:
1.Sunway CONSTRUCTION [] Sdn Bhd
2.Fajarbaru Builder Sdn Bhd – Signatium Construction Sdn Bhd JV
3.WCT – Sinohydro JV
4.IJM Construction Sdn Bhd
5.Ranhill – CCCC JV
6.Muhibbah Engineering Sdn Bhd
7.Gamuda Berhad
8.UEM BUILDERS BHD [] – Intria Bina Sdn Bhd JV
9.MMC- Zelan JV
10.MRCB Engineering Sdn. Bhd
11.Trans Resources Corporation Sdn Bhd
12.BPHB – Tim Sekata JV
13.Zabima – Leighton JV
14.Mudajaya Corporation Berhad
15.MTDC – Persys JV
16.Loh & Loh Constructions Sdn Bhd
17.Ahmad Zaki Sdn Bhd

In addition, 15 applicants have been pre-qualified as nominated sub-contractors for the fabrication and delivery of segmental box girder. The successful contractors will be notified officially in due course by Prasarana. The 15 are:

1.Sunway Construction Sdn Bhd
2.Fajarbaru Builder Sdn Bhd – Signatium Construction Sdn Bhd JV
3.WCT – Sinohydro JV
4.IJM Construction Sdn Bhd
5.Ranhill – CCCC JV
6.Muhibbah Engineering Sdn Bhd
7.UEM Builders Bhd – Intria Bina Sdn Bhd JV
8.MMC- Zelan JV
9.MRCB Engineering Sdn. Bhd
10.BPHB – Tim Sekata JV
11.Zabima – Leighton JV
12.MTDC – Persys JV
13.Ahmad Zaki Sdn Bhd
14.Bina Puri – Acre Works – SNC Lavalin JV
15.UEM Construction Sdn Bhd – Projek Penyelenggaraan Lebuhraya Berhad (PROPEL) JV

The financing of the project will be from Islamic bonds guaranteed by the Government. In September 2009, Prasarana had successfully launched RM4.0 billion Sukuk programme of which RM2.0 billion had been raised and oversubscribed by 5.3 times for the 15-year and 2.7 times for the 20-year tranche to part finance the line extension project. The balance of RM2.0 billion will be raised as the project implementation progresses.

Kenanga Investment Launches Four New Call Warrants

KUALA LUMPUR, April 19 (Bernama)-- Kenanga Investment Bank Bhd today launched four new call warrants under its NagaWarrants umbrella brand, namely Affin-CC, MPHB-CC, MRCB-CC and Parkson-CB, in view of the bullish stock market.

Seow Choong Liang, Head of Equity Derivatives and Structured Products of Kenanga Investment, said positive market sentiments following the announcement of the New Economic Model (NEM) on March 30 is expected to benefit some of these companies.

"We believe it is an excellent time to trade call warrants especially in view of the house technical view that the FTSE Bursa Malaysia KLCI will reach 1,400 by the third quarter of this year," he said.

Performance of the selected companies is also a key driver in the launch of the warrants and it will give customers more options to diversify their warrants trading given the current market uptrend, he added.

MRCB – Property the key driver

MRCB – Property the key driver going forward Trading Buy
Visit Note- MRCB re-confirmed that it is keen on the Federal land parcels but acknowledged that “it is up to theGovernment to decide on which entity it will award the land to”. We maintain our view that MRCB’sproposed 1-for-2 rights issue is a prelude to these land deals.- MRCB expects its property turnover to increase from 30-40% of group turnover in FY12/09-10, to in excessof 50% by FY12/11, with the construction work on several components of KL Sentral gaining momentum.We believe the “transformation” of MRCB from a largely construction-dependent group to a largelyproperty-dependent group will be made easier with new property projects on the Federal land.- FY12/10-11 EPS are reduced by 12-13%, having reflected dilution from an enlarged share base.- Fair value is rationalised down by 3% from RM1.71 to RM1.66 (ex-rights), having reflected the dilution fromthe rights issue, mitigated by the change in our valuation methodology for KL Sentral from PER to DCF.

MRCB falls, right issue going ex on Jan 28

KUALA LUMPUR: MALAYSIAN RESOURCES CORP [] Bhd's share price fell in active trade ahead of the renounceable rights issue of up to 482.27 million new shares going ex on Jan 28.

At 3.20pm, it was down eight sen to RM1.57 with 9.02 million shares done.

The FBM KLCI was up 1.2 points to 1,299.19. Turnover was 875.98 million shares done valued at RM892.2 million.

The entitlement date for the rights shares is Feb 2. The corporate exercise involved the rights issue on the basis of one rights share for every two shares held on Feb 2 at 5pm at an issue price of RM1.12 per rights share.

The rights issue is to raise gross proceeds of up to RM566 million.

MRCB's rights issue to go ex on Jan 28

KUALA LUMPUR: MALAYSIAN RESOURCES CORP [] Bhd's renounceable rights issue of up to 482.27 million new shares will go ex on Jan 28.

Its submitting merchant bank, Maybank Investment Bank Bhd, said on Jan 18 the entitlement date for the rights shares is Feb 2.

The corporate exercise involved the rights issue on the basis of one rights share for every two shares held on Feb 2 at 5pm at an issue price of Rm1.12 per rights share.

The rights issue is to raise gross proceeds of up to RM566 million.