MIDF Research maintains ‘buy’ call on MRCB

KUALA LUMPUR: MIDF Research has maintained its ‘buy’ recommendation on Malaysian Resources Corporation Bhd (MRCB) following an upward thrust of its share price by more than 23.5 per cent since July.

The research house also said the favourable call, with a target price of RM2.08, was also due to MRCB’s unique position in infrastructure assets, transport-oriented development and the possible sale of the Eastern Dispersal Link (EDL) in the near term.

“The EDL sale is a key to unlock balance sheet by cutting high debt level,” MIDF Research said in a note.

“We reckon that the sale of the 8.1-km EDL in Johor Bahru could unlock MRCB’s balance sheet which would help to drive forward performance.” MIDF Research, however, is of the opinion that selling off EDL’s equity is a better option than an outright sale.

“This is due to potential traffic growth, supported by Iskandar Malaysia development,” it said.

It said MRCB’s earnings would stay intact for the next three years, backed by its RM1.58 billion construction order book, as well as other projects and development, including Penang Sentral and the Kwasa Damansara MX-1.

TheMX-1projectinKwasaDamansara would give another round of catalyst as the total cost of the project is RM8.0 billion coupled with five per cent fees, it added. — Bernama