After a long wait, Gadang finally won an MRT2 viaduct project worth MYR952.1m. This high profile project should boost market sentiment for the stock, lift its outstanding construction orderbook to c.MYR1.4bn and keep the company busy for the next three to four years. Accordingly, we revise our FY18F-19F earnings but keep our FY17 forecast unchanged. Our SOP-based TP is raised to MYR1.55 (from MYR1.40, 23% upside). Maintain BUY.
We believe this MRT2 project contract award, coming after a long wait, is likely to lift market sentiment on the stock. Hence, we raise our target P/E for Gadang’s construction division to 12x (the higher end of P/E trading band for small-cap construction sector, from 10x) and roll over our valuation base year to FY18 (from 2017). With that, our SOP-based TP is accordingly lifted to MYR1.55 (from MYR1.40), implying 8.5x-10.3x FY17F-19F P/E. This remains undemanding (vs other small-cap construction stocks) especially because we still expect positive news flow for the sector and the company to continue
KUALA LUMPUR (March 10): Mass Rapid Transit Corp Sdn Bhd (MRT Corp) has awarded work packages worth a total of RM2.74 billion to four companies for the MRT2 construction.
The companies are Trans Resources Corporation Sdn Bhd, Gadang Engineering (M) Sdn Bhd, Acre Works Sdn Bhd, Sunway Construction Sdn Bhd, MRT Corp said in a statement.
Gadang Engineering, a unit of Main Market-listed Gadang Holdings Bhd, bagged the highest value contract package worth RM952.09 million. This is for the construction of a viaduct guideway and other associated works from Serdang Raya to Universiti Putra Malaysia.
Trans Resources, meanwhile, has been given the responsibility of constructing a viaduct guideway and other associated works from Kampung Muhibbah to Serdang Raya worth RM858.18 million. Trans Resources is a unit of TRC Synergy Bhd, which is controlled by its founder Tan Sri Sufri Mohd Zin.
Acre Works received the third work package worth RM715.99 million, in which it is expected to complete a viaduct guideway and other associated works from Persiaran Alpinia to Persiaran APEC.
Acre Works’ executive chairman Datuk Idrose Mohamed was formerly the chief executive officer at the then Syarikat Prasarana Negara Bhd (now Prasarana Malaysia Bhd) and also Pos Malaysia Bhd.
As for Sunway Construction — part of Sunway Construction Group Bhd — it was awarded a RM212.3 million job to build elevated stations and other associated works at Damansara Damai, Sri Damansara West and Sri Damansara East.
This is in addition to Sunway Construction’s current job of building the elevated guideway from Sungai Buloh to Persiaran Dagang, Sri Damansara for the MRT2 line, and also building the elevated viaduct for from Section 17, Petaling Jaya to the Semantan Portal for the MRT1 line.
“I wish to welcome them back to the MRT project. Their experience working on the (MRT1) Line will be invaluable, as they have would have many lessons learnt. I believe this will enable them to give their best and perform well for the (MRT2) project,” MRT Corp chief executive officer Datuk Seri Shahril Mokhtar said in the statement.
Shahril added all four winning tenderers were selected on the basis of the best evaluated tender, where the tenders were evaluated on their technical, commercial, legal, financial and Industrial Collaboration Programme (ICP) evaluation.
MRT2, also known as the of the Sungai Buloh-Serdang-Putrajaya (SSP) Line, is 52.5km long and is expected to be fully operational by the second quarter of 2022, with average daily ridership of 529,000 passengers.
TRC Synergy’s share price closed 0.5 sen or 1.06% higher at 47.5 sen today, giving it a market capitalisation of RM228.24 million.
Gadang ended its trade 4 sen or 3.28% higher at RM1.26 today, for a market capitalisation of RM818.26 million.
Sunway Construction meanwhile closed 4 sen or 2.34% higher at RM1.75, valuing the group at RM2.26 billion.
hahaha.....his "get big project not necessary good" article can be used before get project and after get project...both scenario also sound like got point....ask u die or not....
then write "company give good dividend oso not necessary good" cos this means the management dunno how to use money to make more money, and so dumb dun even know how to misaapropriate the company money
jessieps sifu, sure can go up one meh? U dun scare KYY ah? you no good boy, never listen to KYY teaching, later he call you stupid losser then you know
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....
tksw
12,778 posts
Posted by tksw > 2017-03-13 09:10 | Report Abuse
ppl sell on news