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MRCB active, up 1.54% on upgrade

KUALA LUMPUR (Nov 22): Malaysian Resources Corp Bhd (MRCB) rose 1.54% in active trade at mid-morning today after Hong Leong IB Research upgraded the stock to “Buy” at 97 sen with a higher target price of RM1.18 (from RM1) and said MRCB’s 9M core earnings of RM56 million (+62% y-o-y) were above house expectations but below consensus.

At 10.06am, MRCB rose 1.5 sen to 99 sen with 2.30 million shares traded.

In a note today, it said MRCB’s property sales for 9M were strong at RM1.2 billion, a stark improvement from RM192 million for the entire FY16.

It said construction year-to-date job wins were at RM468 million, bringing orderbook to RM5.3 billion (5.8x cover).

“3Q net gearing stood at 114% but this should reduce to 36% in 4Q following the completion of the rights issue.

“Disposal of EDL, Menara Celcom and Ascott could potentially transform balance sheet to net cash.

“Raise FY17-19 earnings by 21%, 13% and 11% after factoring better construction margin and property sales.

“Upgrade to BUY, SOP based TP raised from RM1.00 to RM1.18. EDL disposal to provide near term catalyst,” it said.— theedgemarkets.com

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