The Edge Weekly’s sources said that a JV between MRCB and Ekovest is on the verge of getting an RM8bn award for the Klang Valley river beautification project. We are pleasantly surprised by this news and estimate that the project would enhance MRCB’s FY11-12 net profit by 12-19% and its RNAV by 4-8% due to land acquisition.
If true, this would be an added catalyst for the share price. In view of this and the likelihood of stronger newsflow on 10MP and ETP projects in the coming months, we reiterate our TRADING BUY call. However, we raise our target price from RM2.53 to RM2.86 as we halve our RNAV discount to 10%. Potential re-rating catalysts include (i) this news, (ii) project awards, (iii) increased positive newsflow on ETP, and (iv) progress of the Sg. Buloh Land.
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