KUALA LUMPUR: CIMB Equities Research expects a better outlook for Malaysian Resources Corporation Bhd (MRCB) after a weaker FY16 where core net profit was below consensus.It had Tuesday retained its FY17-18F EPS forecasts and also introduced its FY19F numbers.“Our target price is raised (from RM1.53 to RM1.63) as we revise realised net asset value (RNAV) to reflect the improved net gearing of 0.73 times (still pegged to a 20% RNAV discount).“MRCB’s medium-term catalysts remain deal-driven, on top of likely domestic contract wins. Also, potential renewed developments on the MoU to explore opportunities for a transport oriented development (TOD) in Bandar Malaysia’s phase 1 could be positive for the stock. Full-year DPS of 2.75 sen was below its three sen forecast.“The outstanding order book stood at RM5.4bil. Among the highlights of the results briefing was management gunning for RM8.7bil worth of jobs to tender which, in our view, may include other domestic civil infrastructure jobs in addition to potential new river rehabilitation contracts.MRCB is now qualified to participate in Bumiputera tenders, as the completion of its 20% private placement brought its Bumiputera shareholding to more than 35%. Although construction has been completed, there are still outstanding interior design changes.After more than four months, talks on the potential disposal of the Eastern Dispersal Link (EDL) remain ongoing, though there are few details on the outcome of the indications of interest from two parties.

Source: The Star February 28, 2017 00:45 UTC