Filepic is for illustration purposes
KUALA LUMPUR: MIDF Equities Research sees the continuation of the Light Rail Transit (LRT3) as positive for the MRCB-George Kent JV Co.
“While the project’s costs have been significantly reduced, we are comforted that the cost-savings action did not result in the loss of earnings opportunity for the JV,” it said on Wednesday.
MIDF Research said a greater clarity on the project seems to be the needed positive light for MRCB.
“Moving forward, we are comforted that the project continuation will contribute positively to earnings. Another positive catalyst to the stock includes the disposal of EDL, which is expected to complete in CY19,” it said.
At this juncture, TP is maintained at RM1.07 (buy). It believes the weakness in current share price presents a good opportunity for investors to accumulate.
To recap, on Monday the JV accepted a letter of appointment from Prasarana Malaysia Bhd for the construction of LRT 3 from Bandar Utama to Johan Setia.
A revised sum of RM11.9bil was confirmed, which includes contingency/provisional sum of RM400mil.
The appointment was consequent to 47.0% cost reduction in the total project cost from RM31.7bil to RM16.6bil.
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