MIDF Research has maintained a "buy" recommendation on Malaysian Resources Corp Bhd (MRCB) with an unchanged target price of RM2.41, as it may benefit from the slew of expected contract awards this year.
The research house said the construction sector has regained its momentum since early this year, supported by positive news flow and job awards to contractors.
"We expect MRCB's construction division to recover this year," it said in a research note today, adding, the company had a healthy outstanding order book of RM2.5 billion.
MRCB's external revenue from the construction division was lower by 10.2 per cent year-on-year for financial year 2011, as the company was focused largely on in-house construction works.
MIDF Research said MRCB might top up its construction order book by RM1.5 billion in the current financial year.
It is also expecting MRCB's construction margin to recover this year given lower building material prices, particularly steel bars, which is relatively cheaper as compared to last year.
Steel bars are now trading at RM2,150-RM2,300 per metric tonne, which is five-six per cent lower than the average price in 2011.
Meanwhile, OSK Research has recommended a "buy" on MRCB at an unchanged fair value of RM2.50, as construction of the light rail transit (LRT) extension is expected to fully start this year.
"We expect the construction division to post a better performance as it was awarded a major contract for the LRT extension," it said.
At 12pm, MRCB's shares declined four sen to RM2.20. -- Bernama
The research house said the construction sector has regained its momentum since early this year, supported by positive news flow and job awards to contractors.
"We expect MRCB's construction division to recover this year," it said in a research note today, adding, the company had a healthy outstanding order book of RM2.5 billion.
MRCB's external revenue from the construction division was lower by 10.2 per cent year-on-year for financial year 2011, as the company was focused largely on in-house construction works.
MIDF Research said MRCB might top up its construction order book by RM1.5 billion in the current financial year.
It is also expecting MRCB's construction margin to recover this year given lower building material prices, particularly steel bars, which is relatively cheaper as compared to last year.
Steel bars are now trading at RM2,150-RM2,300 per metric tonne, which is five-six per cent lower than the average price in 2011.
Meanwhile, OSK Research has recommended a "buy" on MRCB at an unchanged fair value of RM2.50, as construction of the light rail transit (LRT) extension is expected to fully start this year.
"We expect the construction division to post a better performance as it was awarded a major contract for the LRT extension," it said.
At 12pm, MRCB's shares declined four sen to RM2.20. -- Bernama
