Construction Sector - MTR CO announces more jobs worth RM3.2bil OVERWEIGHT

- MRT Corp announced that it has awarded four work packages for the construction of the Sg.Buloh-Kajang (SBK) worth a combined RM3.2bil. On average, the four packages work out to ~RM800mil each. The contracts were awarded to Syarikat Muhibbah Perniagaan & Pembinaan Sdn Bhd, Sunway (through Sunway Construction Sdn Bhd), MTD ACPI (through MTD Construction Sdn Bhd) and TRC Synergy (through Trans Resources Corp Sdn Bhd).

- Privately-held Syarikat Muhibbah was awarded Package V1 under the bumi category. Scope of works covers between Sg.Buloh and Kota Damansara stations of the SBK alignment. Sunway was awarded Package V4 under the open category. This section runs between Section 17 in Petaling Jaya and the Semantan Portal – where the alignment will then continue underground.

- MTD-ACPI won Package V7 for works between Bandar Tun Hussein Onn and Taman Mesra in Cheras. TRC clinched the final contract for works related to the Sg.Buloh depot under the open category.

- We are not surprised by this development. We had earlier highlighted that three out of the four companies outlined above – i.e. Sunway, MTD-ACPI and TRC – were in a position to win jobs under the SBK line.

- The latest awards are also within our earlier expectations that up to five major packages would be awarded within the next two months – as highlighted through our special MRT update on 30 April 2012 (Fast-tracking the SBK MRT line).

- From our estimates, the latest contracts bring the  total value of jobs awarded to ~RM13.7bil or close to 70% of the initial cost of RM20bil for the SBK line against a targeted 80% by early-3Q12.

- Further out, the balance of the major work packages would include:- (i) three viaduct packages under the open category – v2: Kota Damansara-Dataran Sunway, v3: Dataran Sunway-Section 16, and v8: Taman Mesra-Kajang); (ii) Kajang depot (bumi category); and (iii) segmental box girdles (southern section); and (iv) elevated station works (bumi: five, open: three). 

- While we opine that the remaining three viaduct packages remain an open affair, we believe WCT and IJM stands a chance for the station works and SBG southern portion packages – while Naim Holdings could emerge as a contender for the Kajang depot works. 

- Similarly, we expect significant gains for suppliers of building materials – where physical construction works on the MRT project could gather momentum from July onwards. This should benefit Ann Joo Resources (steel), Lion Industries (steel), Lafarge Malayan Cement (cement) and KimLun Corp (tunnel lining). For the sub-structure works, Pintaras Jaya could be in the mix of things.

Source: AmeSecurities