Our recent meeting with MRCB’s management reinforced our positive view on the company’s bright earnings prospects and positive news flow. While we maintain our FY11 numbers, we have raised our revenue and earnings forecasts for FY12 by 10% and 14% respectively after taking into account higher property development revenue. Although we maintain our Trading Buy recommendation, our FV is however raised from RM2.58 to RM3.13 after making major adjustments to our SOP RNAV valuation.
Good news abounds. The news flows so far this year has been rather favorable for MRCB. These include its acquisition of land in Setapak, the land swap deal with the Government, as well as news related to the River of Life (ROL) project. We believe that positive news will continue to flow for the rest of the year and 2012, especially those related to potential land deals and the possibility of winning major construction contracts.
Maintain Trading Buy at higher FV. We maintain our Trading Buy recommendation on MRCB with a higher FV of RM3.13 from RM2.58 previously after incorporating some upward adjustments in our SOP of RNAV valuation. Although MRCB’s share price has appreciated by some 20% YTD, we believe the favorable news flow on the company will provide the upside catalysts for the stock.
Good news abounds. The news flows so far this year has been rather favorable for MRCB. These include its acquisition of land in Setapak, the land swap deal with the Government, as well as news related to the River of Life (ROL) project. We believe that positive news will continue to flow for the rest of the year and 2012, especially those related to potential land deals and the possibility of winning major construction contracts.
Maintain Trading Buy at higher FV. We maintain our Trading Buy recommendation on MRCB with a higher FV of RM3.13 from RM2.58 previously after incorporating some upward adjustments in our SOP of RNAV valuation. Although MRCB’s share price has appreciated by some 20% YTD, we believe the favorable news flow on the company will provide the upside catalysts for the stock.
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