THE BUZZ
Yesterday Sunway informed Bursa Malaysia that Mass Rapid
Transit Corp SB (MRT Corp) announced in a press statement on 9 May 2012 that
Sunway Construction SB, a subsidiary of Sunway,
has won the bid for the Sg Buloh-Kajang (SBK) MRT Line, Package V4.
This involves the construction and completion of the viaduct guideway and other
associated works from Section 17, Petaling Jaya to the
Semantan Portal, for a contract sum of RM1.17bn. It said it will
announce on Bursa Malaysia upon receipt and acceptance of the letter of award
from MRT Corp.
OUR TAKE
No surprise. The emergence of Sunway as one of the winning
bidders for the MRT packages came as no surprise as we had anticipated that
Sunway should be able to win some of the MRT packages in view of its strong
capability and track record. We gather that Package V4 stretches
6.6km, which is positive as the job
will enable Sunway to replenish and boost its construction orderbook to
RM4bn, which is the highest ever for the
group. The RM1.17bn contract will account for about 78% of Sunway’s
annual construction orderbook replenishment target of RM1.5bn.
Maintain Buy. We
maintain our forecast at this juncture pending further details on the contract
upon the receipt and acceptance of the letter of award from MRT Corp. We maintain
our Buy recommendation on Sunway, with an unchanged FV of RM3.31, based on a
20% discount to our SOP valuation. We do not rule out the possibility of Sunway winning more MRT packages moving
forward since the company has an excellent track record.
Source: OSK188
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