Journey to Wealth
MRCB - OUTPERFORM - 23 May 2012
Period 1Q12
Actual vs. Expectations
Within ours but above the consensus expectations. The 1Q12 net profit of RM21.6m made up 20% and 24% of ours and the consensus' forecasts of RM109.2m and RM90.8m respectively.
The 1Q12 results were mainly supported by recognition of property sales, especially for Lot G (office towers) and en bloc sales of its hotel and strata office (Lot B Q Sentral).
Dividends No dividend was declared for the quarter.
Key Result Highlights
QoQ earnings fell 15% while the revenue declined by 30%. This was mainly due to the lower construction revenue by 44% due to delays in its on-going projects, i.e. the LRT extension project. Nonetheless, for its property division, the EBIT margin improved from 24% to 27% attributed to en bloc sales and profit recognised for the ongoing property projects, i.e. Lot G and Lot B, Q Sentral.
YoY revenue increased by 48% as its property revenue jumps more than threefold to RM165.7m. The margin for the property division has also improved slightly from 26% to 27% due to the en bloc sales and additional recurring incomes from its property investment (Lot E KL Sentral Park).
Outlook We believe that MRCB is actively bidding for some projects under the ETP i.e. buildings and infrastructure projects, worth about RM500m in the near term. Its current order book stands at RM1.4b for the next two years.
No updates on EDL at this juncture but we believe that the government is likely to honour the Concession Agreement (CA), which will indirectly compensate the concessionaire (EDL).
Forecasts No change to our earnings forecast for FY12 and FY13. We have factored in only conservative earnings contribution from EDL vis-''-vis a RM140m revenue guidance.
Rating Maintain OUTPERFORM
Maintain our OUTPERFORM call given the potential 70% upside from the market price. Valuation ' We are keeping our target price unchanged at RM2.71 based on SOP valuation.
Risks Prolonged negative pre-election sentiments.
Source: Kenanga
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4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Khairul Anuar Cm
PE @ 30X... quite high
2012-07-11 16:57