- We reiterate our BUY call on MRCB with an unchanged fair value of RM2.30/share. This pegs the stock at a 20% discount to its estimated NAV.

- MRCB announced that it has entered into a share sale agreement to dispose its 51% stake in Nu Sentral Sdn Bhd (NSSB) to Pelaburan Hartanah Bhd (PHB) for a total consideration of RM120mil.

- NSSB is the manager and operator of Nu Sentral Mall, which is located within MRCB's flagship KL Sentral integrated development.

- At the moment, NSSB is a jointly-controlled entity between MRCB and PHB (51:49) under a JV agreement signed in January 2008.

- Then, NSSB had also signed another agreement to lease the Nu Sentral Mall (inclusive of car park) from Sentral 384 Sdn Bhd (a wholly-owned unit of PHB) for 99 years.

- The sale of the mall represents MRCB's second transaction with PHB within nine months. Last July, MRCB acquired from PHB, the balance 51% stake in Penang Sentral Sdn Bhd for RM51mil.

- While the proceed from the disposal accounts for only 53% of our valuation for the mall, it paves the way for MRCB to monetise its non-core investments upfront, and commit more resources to building its rising property development profile.

- More importantly, MRCB's newsflow is perking up. Last Tuesday, MRCB confirmed that it had submitted a bid to acquire the French Embassy Land. The tender was submitted on 12 February.

- The Star had earlier reported that MRCB was leading in the bidding race for the French Embassy Land, which could reportedly fetch ~RM1.1bil. Just a week earlier, MRCB won another tender for the German Embassy Land at Jln Kia Peng worth RM259mil (RM3,188psf).

- We continue to like MRCB for its transformational moves to become a property-centric group, as its deleveraging efforts begin to bear fruit. More is to come when it completes the proposed disposal of Platinum Sentral to Quill Capita Trust for RM740mil.

Source: AmeSecurities Research - 27 Apr 2015