Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP
Research House: AMMB
KUALA LUMPUR: Shares of MALAYSIAN RESOURCES CORP [] Bhd (MRCB) inched up in late morning trade on Friday, April 8 following its RM110 million land acquisition deal.
At 11.37am, it was up one sen to RM2.33 with 1.44 million shares done.
Amresearch reaffirmed its HOLD rating on MRCB with its fair value unchanged at RM2.40'' a share based on a 15% discount to its sum-of-parts-derived value of RM2.80 a share.
MRCB had proposed to acquire a company, 59 iNC Sdn Bhd, which has the rights to develop 27.41 acres of land in Setapak.
MRCB planned a mixed development project, comprising commercial and residential PROPERTIES [], with a gross development value (GDV) of RM1.5 billion.
At a total development cost of approximately RM1.2 billion, the expected profits to be derived from the development would be RM300 million representing 20% of the GDV.
Amresearch said it came to understand that 59 Inc has been granted conditional approval to be rightful owner of the said parcels of land provided that the Land Office is paid RM60.8 million for the release of the land.
'We understand the land is located in Setapak Jaya and sits very close to the Duta Ulu Kelang Highway (DUKE) exit,' it said.
The research house said MRCB was looking at developing a mixed commercial/residential project on those parcels of land with an estimated GDV of RM1.5bil with CONSTRUCTION [] to start in FY12F.
'Nonetheless, details are sketchy at this juncture especially on the development mix although we suspect the target market would be a medium to medium-high segment,' it said.
Amresearch said this was positive given its landbank in KL Sentral was depleting with only about 12 acres left for development with a remaining GDV of close to RM6 billion.
'We estimate the new Setapak development would only add about 4% to our SOP ' assuming a profit margin of 23%-25% to be developed over eight years. We expect earnings to jump by about 5%-8% for FY12F-FY13F. Nonetheless, we have not factored in anything given the land deal has not been completed,' it said.
On the flipside, it said MRCB was targeting RM1 billion in order book replenishment in FY11F. MRCB has submitted its bid for civil works on the expansion of LRT lines for package A and B worth some RM1.6 billion in total. It is also expecting renewal on on-going environmental projects in Kuala Sg Pahang and Perai worth about RM1 billion.
Company Name: MALAYSIAN RESOURCES CORP
Research House: AMMB
KUALA LUMPUR: Shares of MALAYSIAN RESOURCES CORP [] Bhd (MRCB) inched up in late morning trade on Friday, April 8 following its RM110 million land acquisition deal.
At 11.37am, it was up one sen to RM2.33 with 1.44 million shares done.
Amresearch reaffirmed its HOLD rating on MRCB with its fair value unchanged at RM2.40'' a share based on a 15% discount to its sum-of-parts-derived value of RM2.80 a share.
MRCB had proposed to acquire a company, 59 iNC Sdn Bhd, which has the rights to develop 27.41 acres of land in Setapak.
MRCB planned a mixed development project, comprising commercial and residential PROPERTIES [], with a gross development value (GDV) of RM1.5 billion.
At a total development cost of approximately RM1.2 billion, the expected profits to be derived from the development would be RM300 million representing 20% of the GDV.
Amresearch said it came to understand that 59 Inc has been granted conditional approval to be rightful owner of the said parcels of land provided that the Land Office is paid RM60.8 million for the release of the land.
'We understand the land is located in Setapak Jaya and sits very close to the Duta Ulu Kelang Highway (DUKE) exit,' it said.
The research house said MRCB was looking at developing a mixed commercial/residential project on those parcels of land with an estimated GDV of RM1.5bil with CONSTRUCTION [] to start in FY12F.
'Nonetheless, details are sketchy at this juncture especially on the development mix although we suspect the target market would be a medium to medium-high segment,' it said.
Amresearch said this was positive given its landbank in KL Sentral was depleting with only about 12 acres left for development with a remaining GDV of close to RM6 billion.
'We estimate the new Setapak development would only add about 4% to our SOP ' assuming a profit margin of 23%-25% to be developed over eight years. We expect earnings to jump by about 5%-8% for FY12F-FY13F. Nonetheless, we have not factored in anything given the land deal has not been completed,' it said.
On the flipside, it said MRCB was targeting RM1 billion in order book replenishment in FY11F. MRCB has submitted its bid for civil works on the expansion of LRT lines for package A and B worth some RM1.6 billion in total. It is also expecting renewal on on-going environmental projects in Kuala Sg Pahang and Perai worth about RM1 billion.
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