Stock Name: MUDAJYA
Company Name: MUDAJAYA GROUP BHD
Research House: CIMB

KUALA LUMPUR: Shares of Mudajaya rose in early trade on Monday, Sept 6 after CIMB Research maintained its BUY call and RNAV-based target price of RM7.94, which is pegged to an unchanged 20% discount to RNAV.

At 10.29am, Mudajaya rose two sen to RM4.50 while Mudajaya-CB added 0.5 sen to 7.5 sen.

The FBM KLCI was up 0.52 of a point to 1,436.19. Turnover was 238.47 million shares valued at RM244.12 million. There were 235 gainers, 193 losers and 214 stocks unchanged.

CIMB Research viewed positively the indications from management on the status of the Securities Commission query on its Indian independent power producer IPP, which appears to be coming to a close.

It said investors are likely to be encouraged by this as well as a local news report's clarification on a previous article stating that there could be more queries.

The appointment of a new chairman should add credibility to Mudajaya's corporate governance and Indian IPP venture.

A closure statement by the SC would be a bonus. We maintain our BUY call and RNAV-based target price of RM7.94, which is pegged to an unchanged 20% discount to RNAV.

'Potential share price triggers include (i) the above positive developments (ii) likely closure by the SC, (iii) contract awards, and (iv) positive earnings surprises. This should extend the rebound of the stock which jumped 53 sen last Friday,' it said.