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Friday, September 19, 2014

TRC Synergy sees biggest gain among highway construction beneficiaries (Edge)

TRC Synergy Bhd saw the biggest increase in share price on Friday among all construction stocks which are touted to be the beneficiaries of the upcoming highways to be constructed next year, in which Works Minister Datuk Fadillah Yusof said RM20 billion worth of jobs will be dished out.

While the highways will give construction players such as TRC Synergy, IJM Corp Bhd, WCT Holdings Bhd, Mudajaya Group Bhd, Bina Puri Holdings Bhd, and Ahmad Zaki Resources Bhd (AZRB) a huge boost in their order books, analysts said investors have already priced in the projects...

Yesterday, Fadillah told reporters that works on seven new highways will begin next year. Those highways are Duta-Ulu Kelang Expressway’s (DUKE) extension works, Kidex, WCE, KL Outer Ring Road (KLORR), Sg Besi-Ulu Kelang Elevated Expressway (SUKE), and Serdang-Kinrara-Putrajaya Highway (SKIP).

Hong Leong Investment Bank’s (HLIB) head of research Low Yee Huap said the aforementioned stocks could be the key beneficiaries for the highways. Nonetheless, news of the highways is not new and have been largely priced in.

“Out of the seven highway projects, six have been previously speculated in the market.Only the SKIP highway has sketchy information. As such, we believe that market has mostly priced in the above projects as part of contract wins assumption for major construction players,” he said in a note this morning.

HLIB also had hold ratings for all the beneficiaries. The research house’s target prices are: IJM Corp (RM7.09), WCT (RM2.26), TRC (57 sen) and Mudajaya (RM2.48). HLIB did not rate AZRB and Bina Puri.

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