Company Name: MALAYSIAN RESOURCES CORP
| Research House: HLG | Price Call: BUY | Target Price: 2.19 |
MRCB (BUY)
KL Sentral development to remain resilient
'''' We had a discussion with MRCB's management and walked away feeling reassured that the development within KL Sentral will remain robust.
'''' Q Sentral Office has achieved an 80% take up rate from 70% last month, while Tower A of Sentral Residences has achieved 70% sales. ASP/sq ft for these two developments ranges ~RM1,100-1,200 sq/ft and we believe this premium will stay given the uniqueness of KL Sentral.
'''' Overall, MRCB has a huge unbilled sales of ~RM1.2bn, translating to ~6.3x FY10's property revenue and outstanding order book to ~RM1.84bn, translating to ~2.2x FY10's construction and environmental revenue.
'''' On a separate note, 3Q results will be announced either on the 15th or 25th Nov. We are expecting a seasonally weak quarter.
'''' We maintain BUY call on MRCB with an increased TP of RM2.19 after fine-tuning our SOP valuation to reflect Brickfields development and higher rental income.
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Downbeat tone amid external woes
'''' The downbeat external woes will accelerate an overdue correction on KLCI towards the immediate near term supports at 10-d SMA (now at 1459) and 50-d SMA (1435) pts. Further supports are 61.8% FR at 1421 and 30-d SMA (at 1417) levels. Immediate resistance zones are 38.2% FR (at 1488), 1493 and 1500 psychological barrier.
Hang Seng Index: Heading towards 18k on weakening technicals''
'''' Technically, near term HSI outlook has turned negative following the failure to reclaim the 100-d SMA (now at 20337) and the downtrend slope (near 21660) coupled with deteriorating technical readings. Immediate resistance levels are 20337-22016 while supports are situated at 18000-19000.
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