- We maintain our BUY call on MRCB with an unchanged fair value of RM2.20/share (at 20% discount to its RNAV).

- MRCB announced to Bursa Malaysia that it has received a letter of award from Kwasa Land for the development of project MX-1.

- MRCB beat five other submissions to win the mandate to develop MX-1. The evaluation process included financial, technical and commercial considerations.

- The other known bidders were Guocoland Malaysia, Putrajaya Holdings, SP Setia, UEM Sunrise and YTL Corp.

- We understand that MRCB will have 30 days to sign a definitive agreement with Kwasa Land, starting from the date of the letter of award.

- We are positive with this latest win, as MX-1 is one of the prime parcels of the Kwasa Damansara project. It has been earmarked as the town centre under this massive integrated township.

- The indicative GDV of MX-1 is ~RM7bil. It is scheduled to be developed within 12 years. It will also be well-connected to a network of four expressways, two MRT stations and is within close proximity of the SkyPark air terminal.

- We believe that MRCB’s track record in developing the KL Sentral integrated transport hub and development was pivotal in its successful bid for MX-1.

- It comes shortly after MRCB has reached a settlement agreement with Perbadanan Kemajuan Negeri Selangor (PKNS) for the former to acquire a 70% stake in PJ Sentral Development from Nusa Gapurna.

- More importantly, these latest developments vindicate our earlier conviction of MRCB’s seamless transformation into a property-centric group.

- To be sure, the group will be reclassified from the construction sector to the property sector under Bursa Malaysia on 7 July 2014.

- We maintain our BUY call for now and maintain our fair value pending a further update from management. 

Source: AmeSecurities