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Author: PublicInvest   |   Latest post: Fri, 19 Apr 2019, 10:04 AM

 

TRC Synergy Berhad - Ceasing Coverage

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TRC Synergy’s 3QFY18 net profit came in at RM9.9m (+3.1% YoY, +110.6% QoQ) primarily driven by better gross construction recognitions achieved during the quarter upon closing of accounts of certain projects. Stripping out unrealized foreign currency gain of RM2.1m, the Group’s YTD net profit of RM14.3m constituted c.79% of our full year estimates which we deem as in line we believe the higher construction margin recorded is not sustainable and should normalize to single digit in the coming quarters. Outstanding orderbook is estimated in excess of RM2bn. We are ceasing coverage on TRC Synergy due internal resource reallocation coupled with sector de rating and limited catalysts in the near term. Access to management is also limited. Our last recommendation for the stock is Neutral with a TP of MYR0.45.

  • Ara Damansara property development project. The long-awaited Ara Damansara property project is now believed to be at the last stages of finalization, which consists of service apartments, hotel, office block and retail mall. The total estimated GDV for the project is c.RM1bn. We understand that the first phase is estimated to be c.RM300m and the launch is yet again deferred to early 2019 due to slower-than-expected authority approvals.

Source: PublicInvest Research - 28 Nov 2018

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