Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining a trading buy on MALAYSIAN RESOURCES CORP [] Bhd and raised the target price to RM1.75 from RM1.63. It said on Wednesday, March 10 the Employees Provident Fund Board's (EPF) offer of RM1.50 per share was a 5% premium to MRCB's weighted average price (VWAP) over the last two months and 3% below Tuesday's closing price of RM1.55. "Despite the slight premium we do not view the offer as attractive given that our previous fair value of RM1.63 per share exceeds the offer by 8.6%. Given that the EPF intends to maintain the listing status of MRCB we do not believe a privatization will likely occur. Nevertheless, the fact that the EPF is willing to make a takeover over offer shows that the EPF sees value in MRCB," it said. On the offer, OSK Research said at a glance the offer seems to be triggered more by a technicality after the excess shares allotment following the recent right issue. It added that some might even view the low premium for the offer price as an indication that the EPF does not desperately want to increase its stake in MRCB and that the offer only came about because of the laws requiring the EPF to do so. "However we could not rule out the possibility that the EPF does indeed have a intention to significantly increase its stake in MRCB but not to the extent of privatizing the company. One could also view the EPF's move as an effort to turn MRCB into its property arm which we believe is inline with the EPF's intention to increase its investment exposure in the property market," it said. OSK Research said although it is hard to predict the outcome from the offer as well as the possible move that might be taken by EPF as MRCB largest shareholder, it maintains its TRADING BUY recommendation as it believe regardless of the changes in its shareholder structure, there is still a lot of potential for the company. This underpinned by the strong business turnaround coupled with the possibility of JVs with the Government to develop government land, similar to what the Naza group has secured. "After some adjustment in our SOP valuation we have raised our TP from RM1.63 previously to RM1.75," it said.
Company Name: MALAYSIAN RESOURCES CORP
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining a trading buy on MALAYSIAN RESOURCES CORP [] Bhd and raised the target price to RM1.75 from RM1.63. It said on Wednesday, March 10 the Employees Provident Fund Board's (EPF) offer of RM1.50 per share was a 5% premium to MRCB's weighted average price (VWAP) over the last two months and 3% below Tuesday's closing price of RM1.55. "Despite the slight premium we do not view the offer as attractive given that our previous fair value of RM1.63 per share exceeds the offer by 8.6%. Given that the EPF intends to maintain the listing status of MRCB we do not believe a privatization will likely occur. Nevertheless, the fact that the EPF is willing to make a takeover over offer shows that the EPF sees value in MRCB," it said. On the offer, OSK Research said at a glance the offer seems to be triggered more by a technicality after the excess shares allotment following the recent right issue. It added that some might even view the low premium for the offer price as an indication that the EPF does not desperately want to increase its stake in MRCB and that the offer only came about because of the laws requiring the EPF to do so. "However we could not rule out the possibility that the EPF does indeed have a intention to significantly increase its stake in MRCB but not to the extent of privatizing the company. One could also view the EPF's move as an effort to turn MRCB into its property arm which we believe is inline with the EPF's intention to increase its investment exposure in the property market," it said. OSK Research said although it is hard to predict the outcome from the offer as well as the possible move that might be taken by EPF as MRCB largest shareholder, it maintains its TRADING BUY recommendation as it believe regardless of the changes in its shareholder structure, there is still a lot of potential for the company. This underpinned by the strong business turnaround coupled with the possibility of JVs with the Government to develop government land, similar to what the Naza group has secured. "After some adjustment in our SOP valuation we have raised our TP from RM1.63 previously to RM1.75," it said.
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