KUALA LUMPUR (Nov 9): Malaysian Resources Corp Bhd (MRCB) will be a company to watch next year as the builder and property developer capitalises on its asset base growth from new projects, according to AmResearch Sdn Bhd.
AmResearch analyst Mak Hoy Ken said these included MRCB's Bukit Jalil National Sports Complex refurbishment project besides its real estate development within Cyberjaya City Centre.
"MRCB is approaching the tail end of its restructuring moves to optimise its corporate structure, balance sheet and growth trajectory, under the stewardship of the entrepreneurial management team from Gapurna.
"2016 would be a lift-off year; MRCB would be moving from restructuring to growth, giving its share price a big kick," Mak wrote in a note today.
Mak said AmResearch today lifted its target price (TP) for MRCB shares to RM2.12 from RM1.65. The TP upgrade came with an unchanged "buy" call.
At 3.32pm, MRCB shares rose one sen or 0.7% to RM1.49 for a market capitalisation of RM2.66 billion.
Mak said the reason for the higher TP was an increase in AmResearch's net asset value (NAV) estimate for MRCB. The increase was due to the accretion in MRCB's asset value from its recent infrastructure and land deals.
"We reaffirmed our 'buy' rating on MRCB and raised our fair value from RM1.65/share to RM2.12/share — based on lower discount of 35% (previous: 40%) to our revised NAV of RM3.25/share," Mak said.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)