Mudajaya announced that it has received the Letter of Award from TPPT SB to design and build an access road connecting the North South Expressway to a building site in Rawang, Selangor. The contract is valued at RM30m and works are expected to be completed within two years.

A surprise win. The announcement, which is a positive surprise, boosts Mudajaya's jobs secured YTD to RM1.85bn. We expect no new job wins for the remainder of the year. We make no change to our core assumptions for now, with our FY12 forecasts left unchanged, while our FY13 net profit estimates are revised up by a marginal 0.7% to incorporate the contribution from this new contract.

NEUTRAL. Overall, while we are positively surprised by Mudajaya's strong job wins YTD, we continue to take a cautious stance on the company pending finalization of the fuel supply agreement between its 26%-owned associate RKM Powergen and Coal India Ltd. We maintain our NEUTRAL call for now, with an unchanged FV of RM2.88, pegged at a 50% discount to our SOP valuation. We attach this steep discount to the entire SOP value as a sizeable 80% of its earnings come from the Chhattisgarh project.

Source: OSK