Stocks to Watch Southern Steel, Sunway, TRC Synergy, Malayan Flour Mills, KKB Engineering, Sime Darby, MMHE

KUALA LUMPUR (May 10): Investor sentiment at Bursa Malaysia on Thursday may remain weak in line with the gloomy sentiment at most global markets, as political uncertainties in Greece and the rising costs of fixing Spain's banks ignited worries that the eurozone's debt crisis was worsening.

The concerns over Europe added to worries about the impact of softer growth in the US on the global economic outlook, causing a broad retreat from risky assets with world shares falling, oil prices down for a sixth straight session and the commodity-linked Australian dollar hitting new lows, according to Reuters.

The market's immediate attention was on Athens where efforts to form a government were expected to fail, putting its ability to meet the terms of its bailout deal in doubt and raising the possibility of Greece being forced out of the euro, it said.

Among the stocks that could be in focus on Thursday are SOUTHERN STEEL BHD [], Sunway Bhd, TRC SYNERGY BHD [], MALAYAN FLOUR MILLS BHD [], KKB ENGINEERING BHD [], SIME DARBY BHD [] and Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE).

Southern Steel has entered into a joint venture (JV) agreement with Belgium-based NV Bekaert SA (NV BK) to form a JV company in Singapore to manufacture specified steel wires in the Asean region. It said in a filing on on Wednesday that it would hold 45% in the JV, with NV BK holding the remaining 55%.

Sunway Bhd's unit Sunway CONSTRUCTION [] Sdn Bhd and TRC Synergy Bhd's subsidiary Trans Resources Corporation Sdn Bhd were among the companies that secured four additional construction packages worth RM3.22 billion for the Sungai Buloh-Kajang MRT.

Sunway Construction was awarded package V4 worth RM1.17 billion, for works between Section 17, Petaling Jaya and the Semantan Portal, while Trans Resources was awarded the Depot package worth RM458.98 million for works related to the Sungai Buloh depot in an open tender category.

Malayan Flour Mills is allocating some RM120 million to expand its flour factory and poultry operations in Malaysia over the next two years. Managing director Teh Wee Chye said the capital expenditure will be financed with the firm's internal funds and bank loans. It has also earmarked US$15 million (RM46.05 million) to expand its two flour factories in Vietnam, he said.

KKB Engineering's net profit for the first quarter ended Mar 31, 2012 fell 60.82% to RM7.71 million from RM19.68 million a year ago, due to the completion of major projects in 2011 and the absence of new projects for both its construction and steel fabrication divisions.

Sime Darby Property and CapitaMalls Asia Ltd will jointly develop a RM500 million shopping mall in Taman Melawati in the Klang Valley. In a joint statement Wednesday, the two companies said they had entered into a conditional agreement to form a 50:50 joint venture to develop the mall on a freehold site in Taman Melawati.

MMHE's net profit for the first quarter ended Mar 31, 2012 fell 39.16% to RM78.27 million from RM128.64 million a year ago, due to the completion of contracts under its engineering and construction arm as well as its marine conversion and repair arm.



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Sunway, TRC up on units getting MRT Corp jobs

KUALA LUMPUR (May 9): Sunway Bhd and TRC SYNERGY BHD [] shares respectively rose on Wednesday after their units were named among the four companies awarded additional CONSTRUCTION [] packages worth RM3.22 billion for the Sungai Buloh - Kajang MRT.

At 3.20pm, Sunway jumped 12 sen to RM2.42 with 1.38 million shares traded while TRC was up two sen to 74.5 sen wih 1.08 million shares done.

MRT Corp on Wednesday said Sunway’s unit Sunway Construction Sdn Bhd and TRC's subsidiary, Trans Resources Corporation Sdn Bhd were among the four companies awarded the additional packages.

Sunway Construction were awarded package V4 for worth RM1.17 billion for works between Section 17, Petaling Jaya and the Semantan Portal, while Trans Resources Corporation were awarded the Depot package worth RM458.98 million for works related to the Sungai Buloh depot in an open tender category.

Meanwhile, Trans Resources Corporation was awarded the final package for works related to the Sg Buloh Depot.



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Sunway, TRC Synergy among beneficiaries of 4 additional packages of RM3.2b for MRT

KUALA LUMPUR (May 9): Sunway Bhd's unit Sunway CONSTRUCTION [] Sdn Bhd and TRC SYNERGY BHD []'s subsidiary, Trans Resources Corporation Sdn Bhd, are among the companies that secured four additional construction packages worth RM3.22 billion for the Sungai Buloh - Kajang MRT.

"After the award of the Viaduct 5 and Viaduct 6 packages in January (to IJM Construction Sdn Bhd and Ahmad Zaki Sdn Bhd respectively), and the award of the underground package in March (to MMC-Gamuda JV), these awards show further progress for the Sungai Buloh-Kajang line," said Datuk Azhar Abdul Hamid, MRT Corp CEO, in a statement on Wednesday.

The packages - Viaduct 1, Viaduct 4, Viaduct 7 and Depot 1 - are worth RM3.22 billion and include the construction and completion of viaduct guideways and related works while the depot package is for the construction of the Sungai Buloh Depot and related buildings.

Sunway Construction was awarded package V4 worth RM1.17 billion for works between Section 17, Petaling Jaya and the Semantan Portal, while Trans Resources Corporation was awarded the Depot package worth RM458.98 million for works related to the Sungai Buloh depot in an open tender category.

Meanwhile, package V1 worth RM1.09 billion, a bumiputera exclusive package, covering works between Sungai Buloh and Kota Damansara was clinched by Syarikat Muhibbah Perniagaan and Pembinaan Sdn Bhd and package V7 worth RM499.98 million was secured by MTD Construction Sdn Bhd for works between Bandar Tun Hussein Onn and Taman Mesra in Cheras, said MRT Corp.


"The evaluation looks at various factors, including technical capability, financial strength and of course price. The key is finding a fit that will ensure the project gets the best technical input from a capable contractor while maintaining costs within our expectation for the packages," he explained.

MRT Corp said it expected to award more tenders over the next month.



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TRC Synergy fair value cut by RHB Research to 85 sen

KUALA LUMPUR (April 23): RHB Research Institute Sdn Bhd has cut its fair value for TRC Synerygy Bhd to 85 sen from 96 sen.

In note Monday, the research house maintained its outperform rating on the stock and said TRC had reiterated that it was going all-out for work packages for the Sg Buloh-Kajang (SBK) Line of Klang Valley MRT project but will stick with its stance of not unduly compromising on margins.

The research house said that in the immediate term, TRC does not expect significant expansion in CONSTRUCTION [] margins as construction earnings will predominantly be underpinned by two key contracts, i.e. LRT line extension and Brunei airport that command relatively lower margins.

“In a brighter note, the recent soft launch of TRC’s gated and guarded property project called Ukay Tropika in the Ulu Klang area with a GDV of RM90m was a runaway success, it said.

“FY12-14 net profit forecasts cut by 8-14%, having reflected lower blended construction EBIT margins of 6.6-7.4% (8.6-8.8% previously), partially cushioned by contribution from Ukay Tropika.

“Fair value is reduced by 12% from RM0.96 to RM0.85. Maintain Outperform,” it said.



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HDBSVR has buy on TRC Synergy, TP 80 sen

KUALA LUMPUR (March 15): Hwang DBS Vickers Research has a buy on TRC Synergy at 75 sen and a price target of 80 sen.

It said on Thursday that TRC Synergy received a letter of award from Kompleks Dayabumi Sdn Bhd for the proposed alteration and addition of CONSTRUCTION [] works to existing Kompleks Dayabumi (Phase 2) for a contract sum of RM36 million.

“This represents TRC’s first contract win for FY12F and accounts for 7% of our new order win assumption of RM500 million. We expect margins to be at about 5%-6% typical of building jobs,” it said.

HDBSVR said the bigger catalyst remains the MRT project. TRC is one of 28 contractors short-listed to bid for elevated works of the Sungai Buloh-Kajang line worth RM12 billion (elevated portion).

TRC is present in all categories - elevated civil works, stations and depots - in both the open and bumiputera categories.

“We maintain our Buy rating and TP of 80 sen. This is pegged to 12 times FY12F EPS, which is based on 25% discount to the sector average. TRC’s RM1.3 billion outstanding orderbook provides earnings visibility for two to three years,” it said.



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Stocks to watch: Top Glove, Meda Inc, SunREIT, DRB-Hicom

KUALA LUMPUR (March 15): The sell down across China equities could dictate sentiment on the Malaysian bourse on Thursday following updates that the world’s second largest economy will maintain efforts to curb real estate speculation.

China’s premier Wen Jiabao said on Wednesday that measures to curb property speculation must be maintained to prevent a real estate bubble which will be detrimental to the country’s economy.

Wen’s comments had reversed earlier gains across China stock markets, resulting in major indices finishing in the red.

Hong Kong’s Hang Seng closed down 0.15% to 21,307.8 points, while the Shanghai Composite declined 2.63% to 2391.23. The Shenzen Composite fell 4.09% to close at 969.12.

At Bursa Malaysia, the FBM KLCI rose 11.69 points or 0.7% to close at 1575.71.

Apart from macro factors, analysts, have in fact, warned of bearish technical dynamics in local equities, prompting the anticipation of a sell down in local stocks.

“Given the bearish short-term technical momentum, stocks are likely to drift lower on limited trading participation, as most investors would look for cheaper levels before they are prepared to nibble,” TA Securities Holdings Bhd.

Stocks to watch on Thursday include Top Glove Corp Bhd, Meda Inc Bhd, Sunway Real Estate Investment (SunREIT), DRB-HICOM BHD [], TRC SYNERGY BHD [], TELEKOM MALAYSIA BHD [] (TM) and Axiata Group Bhd.

Top Glove is expected to announce its financial results for the second quarter ended Feb 29, 2012 (2QFY12) on Thursday.

According to analyst reports, Top Glove has guided that its 2QFY12 results will be weaker than the preceding quarter’s numbers. Top Glove shares rose five sen to close at RM4.80 on Wednesday.

Meda Inc Bhd plans to undertake an integrated township in Sungai Siput, Perak with the proposed purchase of 256.04 acres of land from RM13 million. The company said its unit Nandex Land Sdn Bhd has signed a sale and purchase agreement with Majuperak Energy Resources Sdn. Bhd to purchase the leasehold land.

Sunway REIT Management Sdn Bhd has earmarked RM200 million as capital expenditure to transform Sunway Putra Place.

Sunway REIT Management, which is the manager for Sunway Real Estate Investment (SunREIT) said the preliminary capital expenditure (capex) for the refurbishment of the mall is estimated at RM200 million.

“The refurbishment exercise is expected to take about 15-18 months with a projected return on investment (ROI) of 12.5% to 15.0%,” it said.

DRB-Hicom has obtained shareholders consent to acquire a controlling 42.74% stake in national car manufacturer Proton HoldingsBhd. DRB-Hicom fell two sen to RM2.64

CONSTRUCTION [] firm TRC Synergy has secured a RM36 million job to undertake alteration works at the Dayabumi Complex. TRC shares closed unchanged at 75 sen.

ECM Libra Research has upgraded TM’s fair value by 29% from RM3.70 to RM4.78 but maintained its hold recommendation for the stock.

ECM Libra has also revised upwards its earnings forecast for TM by between 1% and 24% for the FY12 to FY14 period.

TM plans to roll out the second phase of its high speed broad band (HSBB) services in smaller industrial areas and state capitals where it is economically viable. TM shares rose seven sen to RM5.13.

Axiata Group’s Indonesian unit PT XL Axiata Tbk is expected to register a 10% growth in its subscriber base to 51 million this year from 46.4 million in 2011. Axiata rose six sen to RM5.12.



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TRC Synergy gets RM36m contract for Dayabumi complex

KUALA LUMPUR (March 14): TRC SYNERGY BHD [] has secured a RM36 million contract for the proposed alteration and additional works to the Dayabumi Complex in Kuala Lumpur.

The company said on Wednesday, its unit Trans Resources Corporation Sdn Bhd had received the letter of award from Kompleks Dayabumi Sdn Bhd to undertake the project on Tuesday.

“The board, after having considered all aspects of the letter of award is of the opinion that the letter of award is in the best interest of the TRC Group,” it said.

TRC said the project would contribute positively to the earnings and earnings per share of the TRC group in the future.



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OSK maintains neutral view on the market

TEFD: What is your outlook for the Malaysian stock market and economy for 2012?
Eng: We remain neutral on the market as we see downside potential for the global economy and the Malaysian market.

What is your target for the FBM KLCI for 2012?
We maintain our 2012 fair value for the KLCI at 1,466 points.

How do you think the euro debt crisis will play out and what impact will it have on Malaysia?
I believe there is a high chance that Greece will eventually have to default. Whether it leaves the euro region at that point is still too difficult to say. Whether or not Greece defaults, a number of European countries should slip into recession in 2012 dampening global growth and trade and thus affecting Malaysia.

The years 2010-2011 were seen as years of merger and acquisition (M&A) activities, and the government’s Economic Transformation Programme (ETP). What do you see as the domestic theme for 2012?
For 2012, it will be the election and post-election Malaysia which could well see a rollback of subsidies and how Malaysian companies will need to increase their efficiency to cope with this.

If general elections are held in 2012, how do you expect the market to react, pre- and post-election?
We found that buying just before an election and exiting one month later is the most consistent strategy for the Malaysian market, especially since we feel that there is a strong chance of the ruling coalition improving on its 2008 poll performance.

Election trading strategy should be short and tight. As such, investors should: (1) wait for profit-taking ahead of the general election before entering the market; (2) buy just before the election date and ride on the positive post election sentiment; (3) exit about one month after the election; (4) focus on blue chips in the banking, oil and gas and construction sectors rather than on so-called “election plays”.

However, we caution that the longer the government waits to hold an election, the greater the uncertainty of the results.

What sectors do you like for 2012?
Consumer, telco and healthcare.

What sectors would you avoid in 2012?
Tech and auto.

What are your top stock picks and why?
AirAsia Bhd as it benefits from lower oil price and the IPO of an associate; Axiata Group Bhd is still the cheapest telco with room for capital management; Malayan Banking Bhd — cheap and liquid bank vs return on equity; Petronas Gas Bhd — defensive with growth catalyst in liquefied natural gas; Telekom Malaysia Bhd — boosted by Unifi; Dialog Group Bhd — defensive O&G with tank terminals as its catalyst; KPJ Healthcare Bhd — hospital chain still growing strongly with re-rating catalyst from Parkway Pantai’s listing; QL Resources Bhd — replicating Malaysia’s success in Indonesia and Vietnam; Media Chinese International Ltd — benefiting from falling newsprint prices; TRC Synergy Bhd — strong exposure to the ETP via the MRT project.

Your wish list for the year?
For a free and fair election regardless of the outcome. And for racist rhetoric to be made a crime.



This article appeared in The Edge Financial Daily, January 4, 2012.



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OSK: TRC Synergy to sizzle this year

KUALA LUMPUR: TRC Synergy Bhd is expected to sizzle this year with the progress on the RM950 million project of Kelana LRT extension regaining momentum, an investment bank said.

OSK Investment Bank said TRC is a strong contender for the Sungai Buloh-Kajang (SBK) line of the MRT (mass rapid transit) project, given its track record in the Kelana LRT extension.

OSK pointed that TRC was the only contractor that was prequalified for all packages of the RM12 billion SBK line for the KL MRT's open and Bumiputera portions.


"Having purchased all the necessary machinery for the Kelana extension job, we believe it is strong contender for the SBK line's elevated works, especially the Bumiputera portion," it said.

TRC had mobilised the required machinery for the job and will accelerate works to make up for lost time, it added.

The first two packages (V5 and V6), which the company is eyeing, should be awarded in early part of this year.

In its research report to investors, the investment bank said, currently, TRC managed to add RM485 million worth of new projects to replenish its order book.

"This is pretty much in line with our full-year target of RM500 million," OSK said, noting that one notable award was the Brunei Airport upgrade, worth RM318 million, which is expected to drive TRC's financial year 2012 and 2013 earnings.

OSK believes that TRC's earnings are at an inflection point and projects a three-year compounded annual growth rate (CAGR) of 37 per cent.

"We feel that TRC offers an attractive exposure to the KL MRT play," said the firm, which has tagged a "buy" on TRC.



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OSK Research: 2012 Outlook – be nimble in the “way of the market”

KUALA LUMPUR (Dec 25): OSK Investment Research has a Neutral outlook on the Malaysian market going into 2012 as the combination of uncertain growth outlook in the US and Asia coupled with a positive recession in Europe cloud the prospects for strong earnings growth locally.

Its director Chris Eng in his 2012 market outlook strategy report on Dec 23 said that while Malaysia would likely avoid slipping into a recession, the deficit reduction exercises undertaken by Eurozone economies may well tip their slow growing economies into a recession.

“In any case, for Malaysia, we see earnings growth slipping to between mid single digits and low double digits, a pale shadow of what it was in 2006, 2007 and 2010 when earnings growth came in between 20 to 30%,” he said.

Eng said newsflow on developments surrounding the handling of sovereign debt in Europe and the US would also likely lead to volatile markets worldwide, adding that in the short term, volatile markets will likely give way to a dampened economic outlook.

“We advise investors stay cautious into mid 2012 and focus on Defensive sectors such as Consumer, Telco, Healthcare and Media.

“Our 2012 KLCI fair value is 1,466 points based on a PER of 13.5 times or 1 standard deviation below the historical average of 16.6 times given the uncertain market conditions,” he said.

At the same time, when trading opportunities present themselves, Banks, O&G and CONSTRUCTION [] should come into play, he said.

Eng said OSK Research was Overweight on 7 sectors, Neutral on 9 and Underweight on 2 sectors.

“In terms of our Top Buys, they reflect this overall strategy.

“Six of our Top Buys, namely Axiata, PetGas, Telekom Malaysia, QL Resources, KPJ Healthcare and Media Chinese reflect our Defensive Strategy while 2 others are from our Alternative Defensive Buys namely AirAsia and TRC Synergy,” he said.



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RHB Research downgrades construction sector to Neutral from Overweight

KUALA LUMPUR (Dec 23): RHB Research Institute Sdn Bhd has downgraded its recommendation for the CONSTRUCTION [] sector to Neutral from Overweight.

In a note Friday, the research house said investors’ confidence and comfort level that the Klang Valley MRT project would start work soon was being chipped away by further delays in the roll-out of certain already long-overdue large-scale projects.

Even if the Klang Valley MRT project is to start work as scheduled, initial progress is likely to be painfully slow due to bureaucratic hurdles, it said.

There is generally a lack of credible new large-scale projects in the pipeline, it said.

“Gamuda and Fajarbaru are downgraded to Market Perform from Outperform.

“No changes in Outperform for TRC, HSL and Eversendai, Trading Buy for MRCB, Market Perform for WCT and Underperform for IJM,” said RHB Research.



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TRC Synergy gains on Putrajaya job

TRC Synergy Bhd, a construction company, gained the most in more than a month in Kuala Lumpur trading after securing a RM38.1 million development contract from Putrajaya Holdings Sdn Bhd.

The stock rose 1.7 percent to 61.5 sen at 9:02 a.m. local time, set for the steepest increase since Nov. 4. -- Bloomberg



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TRC Synergy advances on RM38.1m Putrajaya job

KUALA LUMPUR (Dec 6): TRC SYNERGY BHD [] shares rose on Tuesday after it secured a contract worth RM38.1 million from Putrajaya Holdings Sdn Bhd for the development of terrace and semi-detached houses in Putrajaya.

At 9.22am, TRC Synergy gained half a sen to 61 sen with 84.800 shares traded.

TRC Synergy said on Monday that its wholly owned subsidiary, Trans Resources Corporation Sdn Bhd would develop 86 units of two storey terrace houses and 14 units of two storey semi-detached houses in Precint 14, Putrajaya.

The company said the project would contribute positively its future earnings.



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Stocks to watch Proton, TRC Synergy, SapuraCrest, Hiap Teck

KUALA LUMPUR (Dec 6): The FBM KLCI could trend higher on Tuesday in line with European markets that opened higher on Monday on optimism that European leaders would find a solution to the eurozone debt crisis at a summit a later this week.

The positive mood in Europe looks set to add to the glow from last week's U.S. jobs data with stock index futures pointing to a higher open for equities on Wall Street, according to Reuters.

Market sentiment was given an early boost on Monday after Italy unveiled a 30-billion-euro package of austerity steps, and the Irish government too said it would do the something similar in a new budget to be announced later in the day, it said.

On Bursa Malaysia, stocks that could be in focus include PROTON HOLDINGS BHD [], TRC SYNERGY BHD [], SAPURACREST PETROLEUM BHD [] and HIAP TECK VENTURE BHD [].

Proton shares, which were actively traded on Monday, could continue to attract investor attention after The Edge weekly reported over the weekend that state investment arm Khazanah Nasional Bhd was likely to ask for proposals from interested parties for its stake in the carmaker.

Citing industry sources, The Edge said Khazanah had made overtures and put out feelers to the market, seeking proposals from existing car players on a business plan with regard to Proton.

Khazanah is the largest shareholder with a 42.74% stake in Proton. Proton surged 89 sen on Monday to RM4.50 with 20.1 million shares traded.

Meanwhile, TRC Synergy secured a contract worth RM38.1 million from Putrajaya Holdings Sdn Bhd to build 86 two-storey terrace houses and 14 two storey semi-detached houses in Precint 14, Putrajaya.

SapuraCrest Petroleum Bhd's net profit for the third quarter ended Oct 31, 2010 rose 51.6% to RM83.13 million, due mainly to higher contribution from marine services division.

For the nine months ended Oct 31, SapuraCrest’s net profit jumped to RM233.71 million from RM158.77 million in 2010, on the back of revenue RM1.99 billion.

Meanwhile, Hiap Teck Venture's 55% owned Eastern Steel Sdn Bhd had been granted a mining licence by Trengganu state government to mine iron ore on the area of 600 acres near Bukit Besi.

The mining concession would allow Eastern Steel to mine the area, which has estimate reserve of 40 to 50 million ton of iron ore, until the end of its mining life.



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Trans Resources awarded RM38m jobs

Trans Resources Corporation Sdn Bhd (TRC) has been awarded two development contracts worth RM38.080 million from Putrajaya Holdings Sdn Bhd.

In a filing to Bursa Malaysia today, TRC's parent company, TRC Synergy Bhd
said the contract was received on Nov 25, in the form of Letter of Award (LOA).

The first contract is for the proposed development of 14 units of two-storey
terrace houses and 14 units of two-storey semi-detached housed at Sub-Precinct 14-3, Precinct 14, Putrajaya.

The second is for the proposed development of 72 units of two-storey terrace
houses at Sub-Precinct 14-6A, Precinct 14, Putrajaya.

TRC said, the project will contribute positively, to the earnings per
share of the Group in the future. -- Bernama



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TRC Synergy unit secures RM38.1 million job in Putrajaya

KUALA LUMPUR: TRC SYNERGY BHD [] has secured a contract worth RM38.1 million from Putrajaya Holdings Sdn Bhd for the development of terrace and semi-detached houses in Putrajaya.

TRC Synergy said on Monday that its wholly owned subsidiary, Trans Resources Corporation Sdn Bhd would develop 86 units of two storey terrace houses and 14 units of two storey semi-detached houses in Precint 14, Putrajaya.

The company said the project would contribute positively its future earnings.



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TRC Synergy going all out for MRT, bullish on Brunei

TRC Synergy Bhd (Nov 10, 64 sen)
Maintain outperform with fair value of 81 sen: TRC is going all out for mass rapid transit (MRT) work packages. Its tender department has been instructed to prepare and put in bids for all 18 above-ground work packages of the Sg Buloh-Kajang (SBK) Line of the Klang Valley MRT project worth a total of RM12 billion to RM13 billion based on our estimate.

For elevated civil works, TRC has a significant edge by virtue of the specialised construction equipment it owns, particularly, the RM20 million girder launcher and gantry that we estimate can translate to a two percentage point margin advantage.

TRC is bullish on the construction market in Brunei, given the tremendous room for basic infrastructure spending including roads, housing, hospitals and universities. Already, TRC in October secured a RM319 million contract for the “modernisation” of Brunei International Airport Terminal.

Brunei is not a new market to TRC. Apart from eyeing basic infrastructure projects, TRC has been pitching for a multi-billion ringgit crude oil refinery and storage project there.

The risks include: (i) new contracts secured in FY12/FY13 coming in below our target of RM300 million per year; and (ii) escalation of input costs.

We have turned positive on the construction sector as there is now even more urgency for the government to expedite the rollout of various public projects to pump prime the economy to shield it against the increased risk of the global economy slipping into a double dip recession.


TRC is one of our top picks for the construction sector given that it is a good proxy to the MRT project, the single largest project that will anchor the current construction cycle.

TRC is the only one of the 28 companies shortlisted to bid for the 18 above-ground work packages that is pre-qualified to bid in all six categories.

Indicative fair value is 81 sen based on 12 times fully-diluted FY12 earnings per share of 6.7 sen, in line with our benchmark one-year forward target price earnings ratio of 10 to 14 times for the construction sector.

An additional downside protection to its share price will come from a strong balance sheet with a net cash of RM118.5 million as at June 30, translating to 25.4sen per share. — RHB Research, Nov 10


This article appeared in The Edge Financial Daily, November 11, 2011.

TRC Synergy climbs on building job

TRC Synergy Bhd rose in Kuala Lumpur trading after the Malaysian construction company won a RM51.4 million building contract.

The stock climbed 2.3 percent to 66 sen at 9:24 a.m. local time, its first gain in three days. -- Bloomberg

HDBSVR: KLCI to face selling pressure

KUALA LUMPUR (Nov 1): Hwang DBS Vickers Research (HDBSVR) said it expects the Malaysian stock market to face some selling pressure on Tuesday following the overnight fall on Wall Street.

It said the initial euphoria from the European debt bailout plan seems to be over. Major U.S. equity indices tumbled between 1.9% and 2.5%, triggered in part by Greece’s decision for a referendum on the new agreement on financing for the country.

“Back home, we expect our benchmark FBM KLCI not to be spared from the bearish external sentiment. The benchmark index should come under selling pressures today, possibly retreating towards our immediate support level of 1,475,” it said.

HDBSVR said on the corporate front, stocks that may be in the limelight include Jerneh Asia, following the announcement that its major shareholder, Kuok Brothers will buy out the company as a quickest way to return cash to shareholders;

Also in focus would be Hock Seng Lee, after it secured a RM90.28 million water treatment plant contract from the Sarawak state government.

Meanwhile, TRC Synergy, which was awarded a RM51.3 million contract from Jabatan Kerja Raya to upgrade infrastructures and facilities at the Lumut jetty in Perak.

TRC Synergy's unit secures project worth RM51mil

KUALA LUMPUR: TRC Synergy Bhd's unit Trans Resources Corp Sdn Bhd has been awarded a project worth RM51.39mil by Jabatan Kerja Raya to upgrade the infrastructures and facilities for the jetty operations in Lumut, Perak.

In a filing to Bursa Malaysia, TRC Synergy said the project will not have any effect on the issued and paid-up share capital, substantial shareholders' shareholdings, net assets per share and gearing of the company and its subsidiaries.

The project is expected to contribute positively to the earnings and earnings per share of the TRC Group in the future, it added. - BERNAMA