- We maintain our BUY call on MRCB with an unchanged fair value of RM2.20/share –a 20% discount to its revised Sum-Of-Parts (SOP) value.

- MRCB announced on Bursa Malaysia yesterday evening that it has secured a RM141mil contract from Desaru Peace Holdings Villas Sdn Bhd in Kota Tinggi, Johor.

- The contract is for a duration of 87 weeks with date of site possession within three weeks from the date of acceptance. The scope of works is for the construction and completion of:-

(i) Central facilities, conference centre, SPA, car park with M&E rooms, back of house facilities  and related supporting facilities (excluding structural works);

(ii) 46 units of Club Suites (excluding structural works);

(iii) Two units of prototype villas (excluding structural works); and

(iv) A Beach Club, a Recreational Club, remote back of house and overall infrastructure works.

- The award represents the second construction win for MRCB in FY14F after it secured another building job in Johor worth RM197mil last month.

- This takes the value of MRCB’s new jobs win for the current FY to-date to c.RM338mil. We make no changes to our earnings forecast as the new contract already forms part of our new orderbook assumptions.

- MRCB’s prospects are perking up as its restructuring efforts start to bear fruits. With momentum on its side, we understand that MRCB’s active tender book consists of several prolific jobs in excess of RM100mil each.

- To be sure, the group has reportedly pre-qualified to bid for the RM800mil Kepong waste-to-energy incinerator project.

- We envisage more NAV upside moving into FY15F via the following:- (i) future development profits from PJ Sentral & Kwasa Damansara; (ii) potential monetisation of its prime commercial assets at KL Sentral, starting with Platinum Sentral; (iii) Penang Sentral (piling has commenced); and (iv) selective construction bids.

Source: AmeSecurities