Yesterday MRCB announced on Bursa Malaysia that its 70% subsidiary, Country Annexe SB (CASB), had on 5 July 2011 entered into a Privatisation Agreement (PA) with the Government of Malaysia (Government) and Syarikat Tanah dan Harta SB. Under the PA, CASB will construct several public infrastructure projects in Brickfields worth RM128.7m and in exchange, CASB will be given two pieces of government land in Brickfields measuring about 14,297 sq m and 5,642.71 sq m respectively.
Maintain TRADING BUY. We maintain our TRADING BUY recommendation on MRCB with an unchanged FV of RM2.58, based on SOP of RNAV valuation. We have yet to incorporate the exchange land into our valuation pending further details from the management, especially with regard to the future development on the exchanged land. Overall, the PA is in line with our view that the immediate catalyst for the property sector will be largely driven by positive news, especially with regard to the release of prime government land through land privatization.
Maintain TRADING BUY. We maintain our TRADING BUY recommendation on MRCB with an unchanged FV of RM2.58, based on SOP of RNAV valuation. We have yet to incorporate the exchange land into our valuation pending further details from the management, especially with regard to the future development on the exchanged land. Overall, the PA is in line with our view that the immediate catalyst for the property sector will be largely driven by positive news, especially with regard to the release of prime government land through land privatization.
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