Mudajaya has more reason than ever to be positive about its prospects in 2011 given the goodies under the 10MP and the ETP. The group is targeting over RM1bn worth of new jobs, primarily on the domestic front, and is likely to re-emerge as one of the main beneficiaries of power plant jobs. They include the Janamanjung and Tanjung Bin coal-fired power plants, highways and the LRT project.
The stock is trading at a steep discount of 50% to its RNAV and CY11-12 P/Es of only 6-7x despite its ROEs of 30-37% and a projected 3-year net profit CAGR of 74%. We maintain our earnings forecasts, BUY call and target price of RM7.94, pegged to an unchanged 20% RNAV discount. The main potential share price catalyst is the award of projects, possibly as early as in the next 1-2 months.
The stock is trading at a steep discount of 50% to its RNAV and CY11-12 P/Es of only 6-7x despite its ROEs of 30-37% and a projected 3-year net profit CAGR of 74%. We maintain our earnings forecasts, BUY call and target price of RM7.94, pegged to an unchanged 20% RNAV discount. The main potential share price catalyst is the award of projects, possibly as early as in the next 1-2 months.
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