Mudajaya Group (Inter-Pacific Research) ourperform; target price RM 7.00


  • Valuation: Mudajaya sustained its positive growth momentum for 4 consecutive quarters. We recommend OUTPERFORM with our target price at RM7.0 ascribing forward PE of 14x and EPS of 49 sen. Re-rating catalyst are: (1) new contracts awarded (2) progress of the ultra mega power plant (UMPP) in India (3) stronger results reported in subsequent quarters

  • 1Q10 revenue surged by 90.9% y/y to RM125.4mn: Mudajaya’s 1QFY10 top line surged by 90.9% due to better revenue contribution from the construction division which grew by 98.9% y/y to RM209.7mn and manufacturing division, up 61.3% y/y to RM14.5mn. Net profit rose by 260.3% y/y to RM50.6mn

  • Margins: Margins in 1QFY10 improved, with PBT margins at 32.3% (4QFY09: 27.9%) and net profit margin at 21.1% (4QFY09: 19.4%). The improved margin was due to the contribution from its India IPP project. Moving forward, we expect their margin to improve further, benefitting from its swift overseas projects progress.
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