MMC-Gamuda JV firm to spend over RM100m on tunnel boring machines

IPOH (Dec 17): MMC Gamuda KVMRT (T) Sdn Bhd (MGKT) will spend over RM100 million on refurbishing and upgrading its tunnel boring machines.

The 50:50 joint venture firm of MMC Corp Bhd and Gamuda Bhd is the underground work package contractor for the MRT project Line 1.

MGKT's head of tunneling Ng Hau Wei said the refurbishment and modification works of the tunnel boring machines are in preparation for its next tunneling job.

"We estimate the amount of direct works will cost over RM100 million," he told a media briefing here at their refurbishment plant.

He said the works included the storage and preservation of the boring machines.

According to Ng, MGKT will partner German firm Herrenknecht AG to undertake the necessary works for 10 tunnel boring machines, the same ones which were deployed for MRT Line 1.

Under the agreement, Herrenknecht AG will collaborate with local steel works and heavy engineering specialist Waiko Engineering Works Sdn Bhd to jointly carry out the machine refurbishment works.

Ng foresees the tunneling business in the Southeast Asia region will grow and he said MGKT is looking for more tunneling jobs.

"It is defintely growing if you look at Malaysia and Singapore, and even at Hong Kong. We hope the trend will be positive from now on," he said.

Gamuda erases losses amid downgrades on weaker property sales

KUALA LUMPUR (Dec 17): Gamuda Bhd erased losses after falling as much as 0.8% earlier on analyst downgrades. The earnings and target share price downgrades were subsequent to builder and property developer Gamuda's first quarter earnings report to Bursa Malaysia yesterday.

Today, Gamuda shares increased three sen or 0.6% to RM4.83 at 10:28 am after falling as much as four sen to RM4.76.

Yesterday, Gamuda said net profit rose 12% to RM185.85 million in the first quarter ended October 31, 2014 (1QFY15) from RM165.48 million a year earlier.

Revenue for 1QFY15 improved to RM569.64 million from RM486.12 million. Gamuda declared an interim dividend of six sen per share.

Today, TA Securities Holdings Bhd wrote in a note while Gamuda's 1QFY15 income was within expectation, TA had reduced its FY15 to FY17 earnings forecast for Gamuda by 7% to 7.6%.  

TA also cut its target price for Gamuda shares to RM4.81. This compares to RM5.17 previously, according to TA , which maintained its “sell” call on the stock.

According to TA, it had downgraded its Gamuda earnings forecast in anticipation of lower property sales.
"Its property sales slumped to RM240mn. Unbilled sales dropped to RM1.5bn from RM1.7bn a quarter ago.

"We cut our property sales assumptions for FY15/FY16/FY17 from RM1.84bn/RM1.65bn/RM1.7bn to RM1.0bn/RM1.2bn/RM1.3bn in line with the weaker-than-expected property sales," TA said.

TA also noted that besides Gamuda’s project delivery partner role in Malaysia's mass rapid transit (MRT) project, Gamuda had only one construction project in hand.

According to TA, Gamuda has an outstanding order book of RM1.8 billion, which could last until 2016.
“Should there be any delay in KVMRT (Klang Valley MRT) line 2 or lack of new construction project awards, we foresee an earnings gap in construction division in FY16. This may pose downside risks to the share price,” TA said.

Gamuda Q1 earnings up 12% to RM185.8mil

KUALA LUMPUR: Gamuda Bhd’s earnings in the first quarter ended Oct 31, 2014 rose 12.3% year-on-year to RM185.8mil from RM165.5mil, as its revenue improved 17.2% to RM569.6mil from RM486mil.


Earnings per share in the quarter went up to 8 sen from 7.25 sen in the corresponding quarter a year earlier.

The company, which is involved in construction, property, and water and highway concessions, declared a dividend of 6 sen per share, payable on Jan 28, 2015.


Gamuda said the increase in revenue was mainly due to recognition of revenue from Kesas Sdn Bhd, concession holder of the Shah Alam Expressway, for which it had upped its stake. 


The company said its property division and its water and expressway divisions recorded higher revenue and profits in the quarter under report. However, the construction division recorded lower revenue following the completion of the electrified double-tracking railway project in early November 2014.


Gamuda said it was anticipating a good performance this year from on-going construction projects, substantial unbilled sales of the property division and steady earnings from the water and expressway concessions division.

Maybank IB Research maintains Buy on Gamuda, Target price RM4.10

KUALA LUMPUR (April 23): Maybank Investment Bank Bhd Research has maintained its Buyrating on GAMUDA BHD [] at RM3.57 with a target price of RM4.10 and said the MMC-Gamuda JV's MYR8.28 billion win for the KVMRT Sg Buloh-Kajang (SBK) tunnelling works has enhanced Gamuda’s earnings visibility into 2017, and should provide for earnings growth, at least, into FY13-14.

“We raise our earnings forecasts marginally which have earlier imputed MYR3 billion job win potential for FY12. Our MYR4.10 RNAV-based target price is unchanged.

“Trading at just 12.3 times one-year forward earnings (16 times mean), the stock is undervalued. Maintain Buy,” it said on Monday.



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Stocks to watch: MMC Corp, Gamuda, Destini Prima, building materials

KUALA LUMPUR (April 21): Stocks on Bursa Malaysia could trade range bound next week as investor sentiment remains edgy with the global economic outlook situation still remaining hazy at best, underpinned by the disappointing U.S. economic data last week stirring doubts about the strength of the recovery of the economic giant.

However, the local market could see some excitement over developments from the Klang Valley Mass Rapid Transit's (MRT) project, which could spur activities for building materials players as well.

Among the stocks that could be in focus are MMC Corp Bhd, GAMUDA BHD [] and Destini Prima Bhd.

The MMC Corp Bhd-GAMUDA BHD [] joint venture (JV) has accepted the RM8.28 billion Klang Valley Mass Rapid Transit's (MRT) underground works package.

In separate statements to the exchange last Friday, MMC and Gamuda said their equally-owned JV entity MMC Gamuda KVMRT (T) Sdn Bhd had secured the contract from Mass Rapid Transit Corp Sdn Bhd (MRT Corp) on Thursday.

Destini Prima Bhd, which was formerly known as SATANG HOLDINGS BHD []) has secured a two-year contract worth RM7.90 million from the Ministry of Defence Malaysia.

The company said on April 20 that its wholly owned unit Destini Prima Sdn Bhd (formerly known as Satang Jaya Sdn Bhd) had entered into a contract with MinDef to supply Anti-Tank Ammunition 40mm Rocket Propelled Grenade (RPG) for the arm for a period of two (2) years commencing from 30 April 2012 to 31 March 2013.

On thee outlook for the local market, MIDF Research head of equity Syed Muhammed Kifni said that the extended streak of net purchases of Bursa-listed shares by foreign investors that began in mid-February came to an end in the second week of April.

Subsequently, he said there was a waning strength of average foreign net purchases which conceivably underlies the difficulty of the FBM KLCI to sustain itself above the 1,600 points levels during the past weeks.

The ember of Euro debt crisis which recently re-flared in Spain may have offered the fundamental excuse for some investors to turn ‘risk-off’, he said.

Nonetheless, Syed Muhammed said still healthy internal factors helped provide a backstop against the feeble external dynamics.

“Hence the local market undercurrent is expected to remain positive and the benchmark index should again attempt to knock against the psychological 1,600 points ceiling in the coming days.

“Moreover the US Fed is anticipated to keep the key rates unchanged during its midweek meeting, thus we expect the FBM KLCI to continue trading range bound this week between its immediate technical support and resistance of 1,580 points and 1,610 points respectively,” he said.



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MMC-Gamuda JV secures RM8.28 billion MRT job

KUALA LUMPUR (April 20): The MMC Corp Bhd-GAMUDA BHD [] joint venture (JV) has accepted the RM8.28 billion Klang Valley Mass Rapid Transit's (MRT) underground works package.

In separate statements to the exchange on Friday, MMC and Gamuda said their equally-owned JV entity MMC Gamuda KVMRT (T) Sdn Bhd had secured the contract from Mass Rapid Transit Corp Sdn Bhd (MRT Corp) on Thursday.

"The underground works package comprises the design and CONSTRUCTION [] of tunnels, seven underground stations and other associated works in connection therewith for an approximate length of 9.5km traversing from Semantan north portal to Maluri south portal.

"The articles of agreement between MRT Corp and the JV shall be executed in due course," MMC and Gamuda said.



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RHB Research maintains market perform for Gamuda, FV RM3.78

KUALA LUMPUR (March 29): RHB Research Institute said GAMUDA BHD []’s first half core net profit for the period ended Jan 31, 2012 came in within expectations.

It said on Thursday that Gamuda had provided guidance to analysts about 12% margins from the tunneling package of the Sungai Buloh–Kajang (SBK) line of the Klang Valley MRT project.

“Gamuda ‘would like to believe’ that it has ‘carefully and adequately priced in the risks’,” said the research house.

RHB Research said while tunneling works proper will only start in March 2013, other parts of the job comprising preparatory works for tunneling as well as the CONSTRUCTION [] of the seven underground stations will commence and start contributing before March 2013.

The research house said Gamuda cut its FY12-FY13 property sales forecasts (including land sales) for Celadon City to RM150 million and RM250 million (from RM250 million and RM500 million previously) but raised those for Gamuda City (Hanoi) to RM500 million and RM750 million (from RM400 million and RM600 million previously).

“Gamuda maintained its local property sales target of RM1.35 billion in FY12. So far in 1HFY12, it already clocked up RM870 million sales, boosting its unbilled property sales to RM1.3 billion. Fair value is RM3.78. Maintain Market Perform,” it said.



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HWDBSVR sees KLCI slipping below 1,580

KUALA LUMPUR (March 29): Hwang DBS Vickers Research said there is a possibility that the key FBM KLCI will slip below its immediate support line of 1,580 on Thursday.

In its market outlook on Thursday, it said if the KLCI falls below the 1,580, the index may be on its way to test the next support level of 1,555 in the near term.

This comes as Wall Street lost momentum overnight. Major U.S. stock indices were down 0.5% each amid disappointing economic data and falling crude oil prices.

Hoping to buck the weak market sentiment on our local bourse are two counters: (a) Gamuda after announcing stronger-than-expected quarterly profit yesterday evening; and (b) Bintai Kinden, as it would be involved (via a joint venture arrangement) in a electrical services and control systems job in Singapore’s MRT project valued at S$166 million.

Separately, two ACE Market companies will resume trading: (a) Key West Global, following its plan to venture into the oil & gas industry in Indonesia via the acquisition of convertible bonds for US$52.5m; and (b) Nextnation, which has proposed to acquire land in Cyberjaya for RM18.5 million, a bonus issue of one warrant for every 10 existing shares and a private placement exercise.



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Stocks to watch: Gamuda, Syarikat Takaful, Bintai Kinden, WCT

KUALA LUMPUR (March 29) : While trading momentum in the Malaysian stock market has improved, analysts said cautious sentiment ahead of the country’s general election could prompt traders to safeguard their profits against the backdrop of challenging external macro dynamics.

Apart from less optimistic sentiment on economic growth prospects in the US and China, analysts also foresee the return of inflation as a key theme in financial markets, spurred by rising crude oil prices.

“We remain neutral on Malaysia. On the positive side, we currently do not expect its rates to increase, and we like the defensiveness of the market, with about one-third of its total market cap in defensive sectors, such as telecoms and utilities.

“National elections are likely to add to market volatility as well, although we expect the event to be market-neutral,” HSBC Global Research wrote in a note.

The FBM KLCI of 30 stocks erased earlier gains to finish 4.35 points lower at 1,583.75 points on Wednesday.

Stocks to watch on Thursday include GAMUDA BHD [], SYARIKAT TAKAFUL MALAYSIA BHD [], Bintai Kinden Corp Bhd and WCT BHD []. Other companies which could attract interest are NEXTNATION COMMUNICATION BHD [] and ENG TEKNOLOGI HOLDINGS BHD [].

Infrastructure-based Gamuda’s earnings rose 45.1% to RM136.47 million in the second quarter ended Jan 31, 2012 compared with RM94.02 million a year ago.

For the first half, earnings increased by 47.2% to RM268.79 million from RM182.55 million in the previous corresponding period.

Syarikat Takaful’s share price rose 5% or 15 sen to close at RM3.05 after CIMB Equities Research said the Islamic insurance firm should trade higher at RM4.60 in anticipation of its growth potential.

Bintai Kinden and joint venture partner Samsung C&T Corp have clinched S$166.24 million (about RM405 million ) worth of projects from Singapore’s Land Transport & Authority.

The jobs include the supply and installation of electrical services apart from tunnel ventilation and environmental control systems

Singapore-based Oversea-Chinese Banking Corp Ltd has emerged as a substantial shareholder in CONSTRUCTION [] firm WCT Bhd after acquiring a 5.01% stake in the builder.

Nextnation plans to raise up to RM15.49 million under a private placement of 137.21 million new shares to finance the telecommunication software developer’s commercial land acquisition, and capital needs. Trading of Nextnation shares were suspended from 2.30pm to 5pm on Wednesday.

The board of Eng Teknologi has accepted the revised takeover offer of RM2 a share by the founders and major shareholders of the hard disk drive component manufacturer.

SYF RESOURCES BHD [] swung into the black with net profit of RM3.22 million in the second quarter ended Jan 31, 2012 compared with net losses of RM431,000 a year ago due to higher sales with lower raw material costs.

For the first half ended Jan 31, 2012, it posted net profit of RM42.46 million compared with net loss of RM1.01 million in the previous corresponding period.



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Gamuda 2Q net profit up 45.1% at RM136.47m, upbeat on outlook

KUALA LUMPUR (March 28): Infrastructure-based GAMUDA BHD []’s earnings rose 45.1% to RM136.47 million in the second quarter ended Jan 31, 2012 compared with RM94.02 million a year ago, underpinned by higher contributions from the CONSTRUCTION [] and property divisions.

Announcing the results on Wednesday, Gamuda expected to achieve a stronger performance this year supported by its on-going construction projects, continued strong property sales and steady earnings from the water and expressway concessions divisions.

Its revenue increased by 26.7% to RM769.33 million from RM607.19 million. Earnings per share were 6.6 sen compared with 4.59 sen.

For the first half, earnings increased by 47.2% to RM268.79 million from RM182.55 million in the previous corresponding period. Revenue rose 13.6% to RM1.411 billion from RM1.241 billion.

Commenting on its construction division, it said the increase in profit before taxation was due to higher work progress from the electrified double tracking railway project.

Its property division benefited from higher profits from existing projects in Malaysia and Celadon City’s land sale to Aeon Co. of Japan.

As for the water and expressway concessions division, Gamuda said the financial performance was consistent with last year’s performance.

On the electrified double tracking railway project, it said progress was on schedule with 77% of the works completed. The scheduled completion date for the main section of works from Padang Besar to Ipoh (Spine line) is June 2014, whereas the section of works from Bukit Mertajam to Butterworth (Spur line) is scheduled for completion in November 2014.

On the new Doha international airport project in Qatar, it said the project was substantially completed and was in the early stage of the testing and commissioning phase. It was expected to be handed over to the client in July 2012.

On the Yen So sewage treatment plant project in Hanoi, Vietnam, Gamuda said the project was substantially completed and it was undergoing the testing and commissioning phase. The completed project is expected to be handed over to the client in May 2012.



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CIMB Research ups Gamuda target price to RM4.50

KUALA LUMPUR (March 21): CIMB Equities Research said MRT Corp’s announcement of the award of MRT underground works to the Gamuda-MMC JV came earlier than expected and the RM8.2 billion project cost was higher than guided.

“This is good news for Gamuda and strengthens its position for MRT 2 & 3. We raise our EPS forecasts and target price from RM4.45 to RM4.50, pegged to an unchanged 10% discount to RNAV,” it said in a research report on Wednesday.

CIMB Research said it applied a higher CONSTRUCTION [] P/E of 13 times (12.6 times before), in line with its revised market P/E.

“Gamuda remains a Trading Buy and one of our top sector picks,” it said.



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Stocks to watch: Fajarbaru, KLK, CBIP, Focus

KUALA LUMPUR (March 21): Malaysian equities could be subject to profit taking on Wednesday against a lack of domestic catalysts to drive the market.

Analysts said the strength of the FBM KLCI may be curbed as institutional and retail investors lock in their profits ahead of the country’s impending general election, possibly in May or June this year.

On the global backdrop, the spotlight will be on updates from US and China, sentiments from which are crucial drivers for Asian stock markets, they said.

There is a “lack of strong catalysts” to spur the FBM KLCI higher, Hong Leong Investment Bank Research had said in a market outlook.

The FBM KLCI rose 4.02 points or 0.26% to close at 1,577.62 on Tuesday.

Stocks to watch on Wednesday include Fajarbaru Builder Group Bhd, KUALA LUMPUR KEPONG BHD [] (KLK), CB INDUSTRIAL PRODUCT HOLDING [] Bhd (CBIP) and FOCUS DYNAMICS TECHNOLOGIES [] Bhd.

Other companies which would see trading interest are MALAYAN BANKING BHD [] (Maybank), MMC Corp Bhd, GAMUDA BHD [] and CypARK RESOURCES BHD [].

Fajarbaru secured a RM72.92 million contract from Messrs Shaw Plaza Sdn. Bhd to tear down and rebuild the Shaw Parade complex in Kuala Lumpur.

Kuala Lumpur Kepong Bhd (KLK) is exiting its personal care products under the brand name “Crabtree & Evelyn” with the proposed disposal of CE Holdings Ltd for US$155 million (RM465 million).

“The proposed disposal is expected to bring in a gain on disposal of approximately 11.5 sen per share for the financial year ending Sept 30, 2012,” it said.

In a separate statement, KLK said it was expanding its oil palm PLANTATION [] area in Indonesia with the acquisition of PT. Global Primatama Mandiri (PT GM), which has the rights for 7,400 ha of land in, Kalimantan for plantations.

KLK said on Tuesday its subsidiary KL-Kepong Plantation Holdings Sdn Bhd (KLKPH) had entered into two agreements to acquire 90% of PT GM for RM3.60 million.

HwangDBS Vickers Research Sdn Bhd has raised its target price for CBIP, a manufacturer of palm oil mills, by 23% from RM2.43 to RM3 while maintaining its Buy call for the stock.

This takes into account the stock’s attractive valuations at a forward price to earnings ratio of seven times, HDBSVR said. CBIP was up one sen to RM2.45.

Focus Dynamics, in its response to the query, said it is not aware of any factors contributing to the unusual trading patterns of its shares except for a news report speculating on Datuk Raymond Chan Boon Siew’s proposed acquisition of a 25% stake in the energy-efficient electrical control products manufacturer.

Focus Dynamics said its directors, after deliberating on the news report, have informed that Chan is not a placee in the firm’s private placement exercise.

“The board, however, is not in a position to comment on the report about his plans to acquire equity shares of Focus from the open market,” Focus Dynamics said, adding that the company has not received any proposal from Chan to inject oil and gas projects into the firm.

Maybank president and CEO Datuk Seri Abdul Wahid Omar said the financial services provider plans to set up its branch office in Myanmar as soon as foreign banks are given the approval to do so. Shares of Maybank added one sen to close at RM8.73 on Tuesday.

The MMC Corp Bhd-Gamuda Bhd joint venture has clinched the underground package for the Sungai Buloh-Kajang MRT line with an RM8.2 billion bid. MMC shares climbed 15 sen to RM2.95 while Gamuda added 12 sen to RM3.74.

Cypark Resources targeted to generate turnover of about RM45 million from 2013 when the 33 MW solar capacity from its solar plants are completed.



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MMC, Gamuda in focus after MRT projects

KUALA LUMPUR (March 20): MMC Corp and Gamuda’s securities provided some life into the otherwise lacklustre market on Tuesday as investors stayed mostly on the sidelines in line with the cautious regional markets.

The FBM KLCI closed up 4.02 points or 0.26% to 1,577.62, lifted by gains in IOI Corp and Tenaga. Turnover was 2.14 billion shares valued at RM1.76 billion. There were 314 gainers, 431 losers and 376 counters unchanged.

Hong Kong’s Hang Seng Index fell 1.08% to 20,888.20, Shanghai Composite Index lost 1.38% to 2,376.84, Taiwan’s Taiex shed 0.89% to 7,972.70 but Singapore’s Straits Times Index added 0.42% to 3,002.73.

Market sentiment was cautious as reflected in the broader market where declining stocks led advancers. While there was some fund support for key stocks, trading activity was heavy in penny stocks and lower liners.

The KLCI is one of the laggards among the key regional markets, with the index up 6.27% in US dollar terms year-to-date compared with STI’s 16.55%, Hang Seng Index’s 9.87% and Shanghai Composite’s 7.77%.

IOI Corp and Tenaga rose five sen each to RM5.29 and RM6.54, pushing up the index by 1.39 points.

MMC added 15 sen to RM2.95, pushing the index up by 0.57 of a point. Gamuda rose 12 sen to RM3.74 and Gamuda-WD 10 sen to RM1.45.

The securities of the companies saw active trade after their joint venture won the underground package for the Sungai Buloh-Kajang MRT line with the bid of RM8.2 billion.

Hartalega was the top gainer, up 26 sen to RM8.19, Ta Ann 13 sen to Rm5.88, HLFG 12 sen to RM12, and Batu Kawan 10 sen to RM18.60.

Share prices of Metronic Global and its 17%-owned unit Ariantec Global slipped in active trade. Ariantec fell 3.5 sen to 10.5 sen and it was the most active with 121.23 million shares done while Metronic eased two sen to 11 sen.

Focus, which was queried over the sharp increase in the price of its securities and volume, saw its share price ending the day two sen higher at 21.5 sen. Focus-WA added four sen to eight sen and Focus-WB two sen to 14.5 sen.

Among the index-linked stocks, Petronas Chemicals fell three sen to RM6.71, Public Bank two sen to RM13.62 and RHB Cap three sen to RM8.

Aeon was the top loser, down 25 sen to RM9.13 with 20,500 shares done. Cypark lost 11 sen to RM1.87 and United PLANTATION []s 10 sen to RM25.



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Gamuda, MMC advance on MRT project award

KUALA LUMPUR (March 20): Shares of GAMUDA BHD [] and MMC Corp Bhd rose in Tuesday’s afternoon session after their joint venture won the underground package for the Sungai Buloh-Kajang MRT line with the bid of RM8.2 billion.

At 3.11pm, Gamuda was up nine sen to RM3.71 with 8.66 million shares done while Gamuda-WD added eight sen to RM1.43. MMC rose nine sen to RM2.89 with 1.73 million shares done.

The FBM KLCI was 2.61 points higher at 1,576.21. Turnover was 1.55 billion shares valued at RM935.55 million. There were 268 gainers, 414 losers and 333 stocks were unchanged.

Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) said on Tuesday it had awarded the package to the MMC-Gamuda JV because of the consortium’s strengths in design, CONSTRUCTION [] plant and tunneling equipment, tunneling and station construction methodology.

“The consortium also offered the most competitive price at RM8.2 billion to design and build the 9.5km MRT underground tunnel and seven underground stations,” it said.



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MMC-Gamuda JV clinches underground package for KL MRT

KUALA LUMPUR (March 20): The joint venture of MMC CORPORATION BHD [] and GAMUDA BHD []’s (MMC-Gamuda JV) clinched the underground package for the Sungai Buloh-Kajang MRT line with the bid of RM8.2 billion.

Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) said on Tuesday it had awarded the package to the MMC-Gamuda JV because of the consortium’s strengths in design, CONSTRUCTION [] plant and tunneling equipment, tunneling and station construction methodology.

“The consortium also offered the most competitive price at RM8.2 billion to design and build the 9.5km MRT underground tunnel and seven underground stations,” it said.

MRT Corp said the final evaluation showed that MMC-Gamuda JV was the best evaluated tenderer that offered the technical criteria and the best bid which was 3.4 per cent lower than the second lowest offer.

It said the decision was made at a one stop procurement committee meeting chaired by Prime Minister Datuk Seri Najib Tun Razak at Parliament on Monday.

Elaborating on the factors why the MMC-Gamuda JV was picked, MRT Corp said the JV was selected based on the consortium’s strengths in design, construction plant and tunneling equipment, tunneling and station construction methodology especially in the challenging karstic limestone formation, and for the construction plan and resources it committed.

“MMC-Gamuda JV also stood out because of its past experience in handling underground works in the same ground conditions and for putting together the same team which handled the Stormwater Management and Road Tunnel (SMART) project,” it said.

Works for the underground package will be directly supervised by MRT Corp.

The MMC-Gamuda JV was one of five companies or joint ventures which pre-qualified under a stringent set of criteria to tender the underground package of the MRT project. The other tenderers were Hyundai-Gadang-Chengal Jaya Joint Venture, Taisei Corp, Sinohydro Group Ltd, and the China Railway Group Ltd.



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MMC-Gamuda awarded RM8.2b MRT job

Mass Rapid Transit Corp has awarded a RM8.2 billion tunnelling contract to a joint venture between MMC Corp and Gamuda Bhd.

The single largest package in the mass rail network project was awarded to the companies following a competitive bid with four other tenderers, Mass Rapid Transit, or MRT, said in an e-mailed statement today. -- Bloomberg



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Stocks to watch: Kimlun, PFCE, SIG Gases, Gamuda

KUALA LUMPUR (March 13) : The Malaysian stock market which saw a downward correction on Monday, is likely to find support on Tuesday from a still-liquid market amid positive domestic news flow ahead of the country’s impending general election .

Analysts said the existing uptrend in the FBM KLCI was still intact as the domestic backdrop is still flush with liquidity and foreign funds are still pouring into the local market.

“The FBM KLCI still has more legs” TA Securities Holdings Bhd head of research Kaladher Govindan wrote in a note on Monday.

On Monday, news of China’s economic slowdown dragged Asian stock markets lower. These include updates that the world’s second largest economy’s exports growth coming in at 18.4% in February, way below street estimates of a 31.1% expansion, according to Bloomberg.

A slowdown in China does not bode well for Asian exporting countries where stock indices had reacted negatively to the updates.

Japan’s Nikkei 225 which fell 0.4% to 9,889.86 and Taiwan’s Taiex which was down 1.1% to 7927.55 and Singapore’s Straits Times Index retreated 0.03% to 2962.18. The FBM KLCI of 30 blue chip stocks fell 0.9% or 14.25 points to close at 1,564.75.

Stocks to watch on Tuesday include Kimlun Corp Bhd, PFCE Bhd, SIG Gases Bhd, GAMUDA BHD [], MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and AIRASIA BHD [].

Kimlun Corporation Bhd has secured two contracts worth RM151.61 million for housing projects in Johor Bahru.

It had accepted a RM114.70 million contract from S P Setia Bhd’s unit Bukit Indah (Johor) Sdn Bhd for the CONSTRUCTION [] of service apartments and ancillary buildings.

It also secured a RM36.90 million contract from Keck Seng (Malaysia) Bhd to build 244 houses in Johor Bahru, Johor. The estimated date of completion is September 2013.

Ceramic products maker PFCE is acquiring the entire equity interest in its single largest shareholder PFC Engineering Sdn Bhd for RM300 million under an all share deal which will transform the acquirer into an oil and gas support services provider. PFC Engineering owns 40% of PFCE.

Shares of PFCE last closed at 70 sen on Friday, prior to the suspension of the stock’s trading on Monday. PCFE will resume trading on Tuesday.

SIG Gases Bhd is teaming up with a unit of Iwatani Corporation, Japan to set up a joint venture company to set up facilities in Samalaju Industrial Park, Bintulu, Sarawak.

The JV would pave the way for SIG Gases and Iwatani to be strategic business partners to set up the facilities in Samalaju to produce and supply of liquid products and compressed gases to customers in Sarawak.

RHB Research Institute Sdn Bhd had reduced its fair value for Gamuda shares by 2.8% from RM3.89 to RM3.78. The downward revision factors in potential earnings from the Klang Valley Mass Rapid Transit project into the research firm’s valuation for Gamuda’s construction business, RHB said. Gamuda shares, however, rose three sen to RM3.70.

The Edge weekly, quoting sources, reported that the share swap between the major shareholders of MAS and AirAsia could be unraveled following resistance from the Malaysian Airline System Employees’ Union. MAS shares declined two sen to RM1.36 on Monday while AirAsia fell four sen to RM3.59.



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CIMB Equities Research has technical buy on Gamuda at RM3.66

KUALA LUMPUR (March 9): CIMB Equities Research has a technical buy on GAMUDA BHD [] at RM3.66 at which it is trading at a FY13 price-to-earnings of 17.4 times and price-to-book value of 2.0 times.

It said on Friday the recent consolidation dragged prices towards its 38.2% Fibonacci Retracement levels. Since then, the bulls have made a comeback.

CIMB Research said as long as prices hold on steady above the RM3.54 low, there is a good chance that the candles may edge towards RM3.84 and RM3.94.

“Technical landscape is improving. MACD signal line is poised for a positive crossover while RSI has also hooked upward.

“Aggressive traders may start to take some position here. However, be quick to cut loss if the RM3.54 low is breached,” it said.



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CIMB Research expects strong project pipeline in construction margins

KUALA LUMPUR (March 7): CIMB Research expects a strong project pipeline in the coming months and a gradual recovery in CONSTRUCTION [] margins.

In a note Wednesday, the research house said 4Q was seasonally a strong quarter for contractors but timing of jobs led to some underperformance in results.

“We expect a strong project pipeline in the coming months and a gradual recovery in construction margins.

“The results season also ended with optimism among contractors that project flows will intensify.

“This will be driven by the awards of the MRT SBK line and the potential award of the Gemas-JB double-tracking job. Maintain Trading Buy with IJM Corp and Gamuda as our top pick,” it said.



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CIMB Research maintains trading buy on Gamuda, target price RM4.45

KUALA LUMPUR (Feb 27): CIMB Equities Research is maintaining its trading buy recommendation on GAMUDA BHD [] at RM3.70 with a target price of RM4.45.

It said on Monday that PLUS Expressways Bhd is reportedly looking into taking over Gamuda’s Litrak, which would be good news for Gamuda if the price is right.

“Such a move would make sense but is unlikely to materialise soon. We retain our target price basis of 10% RNAV discount. A takeover move on Litrak would not have a big impact on RNAV but the proceeds could be used to bump up dividends.

“Maintain Trading Buy with project wins as catalysts. Gamuda remains one of our top sector picks,” CIMB Research said.



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