Malaysia’s construction sector’s recovery has been viewed as on track with the MRT3 tenders kicking off optimism in the sector.
“MRT3, the much-awaited mega rail project has been approved by the government early last month, which led us to upgrade our recommendation on the sector from ‘neutral’ to ‘positive’ on March 7 due to it being a major catalyst.
“There will be five turnkey contract packages – two packages for elevated works, one for underground works, one for the integrated rail system and one project management contract.
“The tenders will be called in May, and it is expected to be awarded in 4Q22.
“Positive news flows on MRT3 are expected to generate much interest in construction counters.
“MRT Corp, the project developer and asset owner of MRT3 expected the construction cost to be RM31 billion, in line with our earlier estimations of RM31.2 billion,” the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) said in a report.
The project is an eight-year project which will be fully operational by 2030.
“This mega rail project is a major catalyst for the construction sector in Malaysia, which will provide strong orderbook replenishments for industry players and thus, better earnings visibility,” it added.
Aside from that, the research team pointed out that the revival of MRT3 has injected much optimism into the sector and it believed this might be a prelude to other potential revival of mega projects that were canned after a change of government in 2018.
“The government is also in a situation where it needs to roll out mega projects to pump prime the economy, as construction activities have the greatest multiplier effect.
“One such project that may see light again is the Kuala Lumpur – Singapore HSR. The Transport Ministry will be engaging its Singaporean counterpart this quarter (2Q22) to discuss on the potential revival of the high-speed rail project.
“The Transport Ministry is also considering a feasibility study for a Kuala Lumpur – Bangkok HSR. Both these mega projects, if given the go ahead, would be a major boost for the construction sector,” it said.
All in, MIDF Research believe that 2Q is expected to be positive for the sector as MRT3 tenders are expected to be rolled out soon.
“While there could potentially be delays in the roll out of the project due to multiple factors, we believe that the improving inflow of jobs, domestically and overseas, will be able to keep most of the construction companies under our coverage engaged over the next few years.
“Positive developments for the short term would come from ongoing mega projects, such as the likes of the MRT Putrajaya Line (MRT2) and the LRT3, which are now at prime stages. The MRT2 is almost complete, pending some rectifications and it is scheduled to operate by January 2023. These would lead to accelerated construction works, resulting in higher progress billings,” it said.
Random joining.... Holding tech and construction stock. Previous government - high involvement in construction . Tech - down for too much, time to push it up ?
200 over million means 13 cents each average means 26 million extra cash(23-26 million cash).oppurtunity a plenty.Will upgrade ocr 15 cents or more.Need to wait 3 month started 11 april.tq.
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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....
malinfan
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Posted by malinfan > 2022-04-01 12:18 | Report Abuse
following Dato Ong Choo Meng counter .... sure win!