We are ceasing coverage on TRC Synergy (TRC) despite its latest jobwin, ie a MYR191m contract for the upgrading of the Parliament House.We believe the market is unlikely to re-rate the stock anytime soongiven its persistently low margins and the slow progress of its AraDamansara property project. Our last recommendation for the stock was NEUTRAL, with FV of MYR0.54.

• Second key contract win in FY14.TRC has been awarded a MYR191m contract for the refurbishment and upgrading of the Parliament House by the Public Works Department. This is the second key contract TRC has secured in FY14, boosting its YTD new job wins to MYR606m and its outstanding construction orderbook by 12% to MYR1.8bn (see Figure 1). Assuming an EBIT margin of 5%, the contract will likely fetch MYR9.6m EBIT over the contract period.
• Cease coverage.While we are positive on the latest development, we are ceasing coverage on TRC as we believe the market is unlikely to rerate the stock anytime soon, given its persistently low margins and the slow progress of its property project on a 12.3-acre site in AraDamansara, Selangor.

Source: RHB