CIMB Research upgrades MRCB to Neutral, cuts TP to RM1.35
Business & Markets 2013
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Wednesday, 13 February 2013 09:02

KUALA LUMPYR (Feb 13): CIMB Research has upgraded MALAYSIAN RESOURCES CORP []oration Bhd (MRCB) to a Neutral from Underperform at RM1.26 with a lower target price of RM1.35 (from RM1.50) after the MRCB-Nusa Gapurna deal was finally sealed, injecting 33 acres of prime land and providing earnings visibility beyond KL Sentral.
In a note Wednesday, the research house said the EPS and RNAV dilution was partially offset by the longer-term positives.
“We estimate a 12% dilution to FY14 EPS but maintain our forecasts pending completion of the deal. Even after imputing the surplus value of the new landbank and applying an unchanged RNAV discount of 40%, our target price is lowered due to the 10% dilution to RNAV.
“Though this deal may trigger a reprieve to share price, we upgrade the stock from Underperform to Neutral in view of election risks,” it said.