Maintain OVERWEIGHT. While we regard the recent kitchen sinking exercises as one-off events that
are unlikely to recur, spiraling material prices and escalation of the Middle East crisis remain the key
risks. For now, we maintain our OVERWEIGHT rating on the sector, driven primarily by:
(i) implementation of the various projects under the ETP, and
(ii) the potential of more contract awards as the Govt attempts to generate a feel-good factor given the potential of an early General Election.
Our top picks are Gamuda (BUY, TP: RM4.78) and Mudajaya (BUY, TP: RM7.44). For small cap plays, we like KimLun (BUY, TP: RM2.32).
.
Stock Price RM Target RM Mkt Cap RMm Volume ‘000 PER (x) FY0 ROE % FY1 DY % Rel. Performance % P/NTA(x) Rating
FY1 FY2 1-mth 3-mth 12mth
AZRB 0.86 1.29 238.0 965.9 6.6 5.9 -29.4% 4.5% (24.6) (24.0) (17.8) 1.4 BUY
GAMUDA 3.76 4.78 7,737.5 7,461.7 20.0 16.2 8.5% 3.0% (2.3) (0.9) 16.6 2.2 BUY
HSL 1.80 2.32 1,048.8 648.3 11.2 10.4 23.0% 2.7% (3.0) 1.3 17.0 3.0 BUY
IJM 6.12 6.70 8,268.3 3,832.0 18.3 15.3 5.5% 2.2% (7.2) (1.0) 15.8 2.6 NEUTRAL
KIMLUN 1.65 2.32 377.9 1,037.0 8.9 8.0 21.6% 3.4% (4.9) 8.4 NA 2.0 BUY
MUDAJAYA 4.85 7.44 1,994.5 1,259.1 7.5 7.2 34.9% 0.7% (5.1) 28.1 (20.7) 2.8 BUY
MRCB 2.17 2.58 3,002.9 4,895.1 34.4 29.3 5.2% 0.9% (1.0) 2.2 21.1 2.3 TR.BUY
NAIM 3.25 5.10 812.5 441.5 7.2 6.2 13.7% 2.8% (13.8) (8.9) (14.6) 1.1 BUY
SUNWAY 2.29 2.60 1,390.5 620.2 8.2 7.3 17.1% 1.2% 0.4 1.6 41.5 1.5 BUY
WCT 3.07 3.75 2,424.7 3,318.3 13.1 10.8 9.4% 3.1% (7.6) 2.2 (2.4) 1.9 BUY
Share prices as at 9 March 2011