MRCB  has  accepted  the  Letter  of  Acceptance  of  Tender  from  Johor Land Berhad for the construction of a 30-storey JLand Tower at Komtar JBCC,  Jalan  Wong  Ah  Fook,  Johor  Bahru  at  a  tender  sum  of RM197.4m. The construction period for the works is 24 months and to be completed by November 2016. (Source: Bursa Malaysia)

Comments:

The  contract  award  is  positive  for  MRCB.  Outstanding  external construction order book is estimated to be low at less than RM1bn while the  group  awaits  the  outcome  its  tenders,  including  the  Klang  Valley Double Tracking and CIQ Bukit Kayu Hitam. Based on a pretax margin of  7%,  the  JB  building  job  will  contribute  a  PAT  of  approximately RM10m over 24 months. We maintain our profit forecasts, RNAV-based target  price  of  RM2.26  (50.7%  upside)  and  BUY  rating.  It  is  the contractor for LRT extension  –  Ampang Line Package B (main facilities and  SBGs)  and  is  expected  to  bid  for  jobs  for  the  LRT  3  project disclosed in Budget 2015.

Source: Affin Hwang Capital Research - 14 Oct 2014