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Tuesday, November 27, 2012

TRC Synergy: LRT Project Back on Track (ext.OSK)

TRC’s 9MFY12 topline and net profit of RM371.6m and RM6.0m respectively were above our numbers but below consensus estimates, as the prolonged delay at its RM950m LRT extension project finally ended. With the progress of its single biggest contract now back on track, we are upgrading our FY12 net profit forecast by 13.9%, while keeping our FY13 and FY14 numbers largely unchanged. Maintain TRADING BUY, with FV retained at RM0.83, based on an unchanged 10x FY13 PER.

Smartbiz: TRC's price has been under consolidation for more than 2 months and finally found a strong support at 0.58. the upward strength looks weak but the analysis of OSK might give it a boost. Its overhead resistances are: 0.595, 0.60 and 0.62 which is a tough barrier. Due to the high FV (0.83) given by OSK, this is considered a low risk, high return counter.

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