Stock Name: MMCCORP
Company Name: MMC CORPORATION BHD
Research House: OSK
MMC Corp Bhd
(June 14, RM2.72)
Maintain trading buy at RM2,71 with fair value of RM3.58: Just as we speculated in our June 3 report, MMC announced on Monday that a wholly owned subsidiary of Malakoff had accepted the conditional offer from the government via the Energy Commission to undertake the construction and development of a 1,000MW coal-fired power plant which will be located alongside the existing Tanjung Bin power plant.
The government's offer is subject to the finalisation of the terms of the agreement and approval of the detailed environmental impact assessment. The expected commercial operation date is March 1, 2016.
As we also mentioned in the report, we had expected an announcement to be made only in 3Q11. However, the rumour at that time hinted an announcement would be made earlier than expected, which is now proven correct.
We still expect MMC to incur a capex of RM4.5 billion and our profit forecasts are minimally changed up to 2012 as financing costs will be incurred starting from 2013.
Even as we had upgraded MMC back to a 'trading buy' on June 3 on potentially good news, which has now materialised in the form of the award of Tanjung Bin's extension, we see more good tidings ahead. These would include the kicking off of the MRT project in July and other construction projects that may be announced before year-end. We continue to recommend a 'trading buy' on MMC. ' OSK Research, June 14
This article appeared in The Edge Financial Daily, June 15, 2011.
Company Name: MMC CORPORATION BHD
Research House: OSK
MMC Corp Bhd
(June 14, RM2.72)
Maintain trading buy at RM2,71 with fair value of RM3.58: Just as we speculated in our June 3 report, MMC announced on Monday that a wholly owned subsidiary of Malakoff had accepted the conditional offer from the government via the Energy Commission to undertake the construction and development of a 1,000MW coal-fired power plant which will be located alongside the existing Tanjung Bin power plant.
The government's offer is subject to the finalisation of the terms of the agreement and approval of the detailed environmental impact assessment. The expected commercial operation date is March 1, 2016.
As we also mentioned in the report, we had expected an announcement to be made only in 3Q11. However, the rumour at that time hinted an announcement would be made earlier than expected, which is now proven correct.
We still expect MMC to incur a capex of RM4.5 billion and our profit forecasts are minimally changed up to 2012 as financing costs will be incurred starting from 2013.
Even as we had upgraded MMC back to a 'trading buy' on June 3 on potentially good news, which has now materialised in the form of the award of Tanjung Bin's extension, we see more good tidings ahead. These would include the kicking off of the MRT project in July and other construction projects that may be announced before year-end. We continue to recommend a 'trading buy' on MMC. ' OSK Research, June 14
This article appeared in The Edge Financial Daily, June 15, 2011.
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