Investment Highlights

• We maintain our UNDERWEIGHT recommendation on MRCB with an unchanged fair value of RM0.77 based on SOP valuation (Exhibit 4). We made no changes to our FY19–FY21 earnings forecasts.

• MRCB hosted a site visit yesterday to showcase its new building system MRCB Building System (MBS) at Kwasa Sentral. MBS is developed to reduce the dependency on manpower and lower material wastage.

• MBS is a combination of prefabricated prefinished volumetric construction (PPVC) system, coupled with a jointing system called the candle-loc connection system. MRCB plans to implement MBS in all residential buildings for its Kwasa Sentral project.

• The building components are fabricated completely offsite and delivered to the site to be installed using the candle-loc connection system, a fastening process, to form a unit. These units will then be stacked on one another and locked into positions to form a building. The units can be used for lower, medium and high-end developments for single-storey, low-rise and high-rise buildings such as schools, hospitals, hotels and offices.

• Upon the fabrication of the components, the modules are assembled and installed into position on site. MBS will also fabricate the architectural fittings and interior finishes, allowing for total customisation of the units. MBS’ floor cycle is approximately 4 days in comparison with conventional methods whereby floor cycles can take up to 21 days.

• According to MRCB, under MBS, 95% of the building works are done off-site compared with the IBS system where only about 30% of works are off-site.

• MBS will bring long-term benefits to MRCB such as cost savings and better project management control. However, it is still early to quantify the impact on earnings; hence we are not making any changes to our earnings forecasts.

Source: AmInvest Research - 5 Jul 2019