Company Name: MALAYSIAN RESOURCES CORP
| Research House: HLG | Price Call: BUY | Target Price: 2.05 |
MRCB (BUY, NEW)
Strategic integrated property developer
'''' MRCB's earnings growth for the immediate term will be supported by the existing development of KL Sentral, which has a huge unbilled sales of ~RM1.2bn, translating to ~6.3x FY10's property revenue. Hence, providing strong earnings visibility over the next few years
'''' From 2013 onwards, rental income will become a substantial earnings contributor for the Group as NLA will jump from the current ~995 sq ft to ~2,400 sq ft, which will most likely make up ~15% of MRCB's PATAMI. New investments ' 348 Sentral and Nu Sentral Retail Mall have already received ~60% commitment for its NLA and we expect it to be fully occupied as the unique proposition of KL Sentral will be able to address the huge incoming supply of office space within KL
'''' With the unique qualities of KL Sentral to support earnings growth and potential in developing strategic land banks, coupled with an healthy property unbilled sales and construction order book, we initiate with a BUY call on MRCB, which provides 24% upside from our TP. TP of RM2.05 based on SOP valuation.
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FBM KLCI: Banking on Euro-crisis resolution
'''' Technical indicators are beginning to improve following yesterday's strong gains but whether it is a sustainable bounce hinges on the follow-through reaction from Europe this week. Supports are 1310 (26 Sep pivot low), 1300 and 1293 (38.2% FR from 311 low and 1597 high) whilst strong resistance levels are the 1377-1387 gap'' (23 Sep) and 1400 pts
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MUDAJAY: Potential rebound targets at RM2.13-2.35
'''' The 4.4% jump in share prices to RM1.88 yesterday, accompanied by 21% hike in volume could indicate a temporary bottom for MUDAJYA, given its steep oversold positions, cheap valuations, continuous share buyback and a 2.5 sen interim dividend (ex-date: 6 Oct). Technical rebound targets are RM2.13 (10-d SMA) to RM2.36 (mid Bollinger band) whilst supports are RM1.61 (23.6% FR) to RM1.80. Cut loss below RM1.60.
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