Maintain NEUTRAL at lower TP. With no financial impact on MRCB following the scrapping of the potential merger, we maintain our forecast and NEUTRAL recommendation on MRCB, but revert to a lower TP of RM2.05 based on SOP valuation (which was our previous target price prior to the merger announcement), against our previous TP of RM2.30 based on the merger valuation. We believe the negative reaction arising from the aborted merger on
MRCB’s share price would be rather muted given that the market has generally viewed the proposal as being unfavorable, judging from the negative impact on its shares when the MOUwas announced on 23 Nov 2010. Since then, MRCB’s share price has been languishing at levels below the pre-MOU period.
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