- We reiterate our BUY call on MRCB with an unchanged fair value of RM2.22/share (20% discount to its NAV). The Star reported that MRCB is tipped to refurbish various sports facilities within the National Sports Complex (NSC) at Bukit Jalil.

- The buildings within the NSC premises include the Bukit Jalil National Stadium, Putra Stadium, National Hockey Stadium, National Aquatic Centre, and National Squash Centre.

- These facilities were constructed by the UEM-Renong group back in the 90s for the 1998 Commonwealth Games, which Malaysia hosted. However, the buildings have not undergone any significant refurbishment works since then.

- For example, the Bukit Jalil stadium – now 17 years old – is still the main venue for sporting events held in Malaysia. The Star report revealed that the refurbishment work could entail a budget of ~RM1bil.

- Thus far, MRCB is said to have submitted the proposal to the Youth and Sports Ministry and is awaiting a decision from the latter. In return for undertaking these initiatives, we understand that MRCB is to receive parcels of land in the vicinity of the NSC.

- We maintain our earnings forecast for now pending more clarification of this latest development. The funding is another key consideration.

- But should it come through and the terms of favourable, such a proposal could provide MRCB with access to prime development land within the mature Bukit Jalil neighbourhood.

- Based on our channel checks, development land in Bukit Jalil is difficult to secure – particularly the tracts of land within the NSC.

- A few of the notable ongoing projects within the area include Pavilion 2 by the JV between Malton and Ho Hup. Further down the road in OUG, WCT is developing Paradigm KL (NLA: ~1.5mil sf).

- From a strategic standpoint, we like MRCB’s continued endeavours to increase landbank via innovative proposals. This puts the group firmly ahead in its transformation into a property-centric group.

- At the same time, more asset monetisation and deleveraging moves could be on the cards via MRCBQuill REIT. The stock is currently trading at a steep 57% discount to its NAV.

Source: AmeSecurities Research - 1 Jul 2015