E BUZZ
According to Financial Daily, MRT Corp has awarded v3 viaduct package which spans from Dataran Sunway to Section 17, Petaling Jaya, to Mudajaya Corp for a total contract value of RM816.2m.
OUR TAKE
A surprise win. The announcement, which is a positive surprise, boosts Mudajaya’s jobs secured YTD to RM1.82bn. Going into 2H12, it has already exceeded our expectations and we expect no new job wins for the remainder of the year. Assuming a quarterly burn rate of RM400m-RM500m, the company’s outstanding orderbook of approximately RM4.4bn should last it well into 2HFY14. We make no change to our core assumptions for now with our FY12 forecasts left unchanged while our FY13 net profit estimates are revised up by a marginal 3.7% to incorporate maiden contribution from this v3 viaduct package.
NEUTRAL. Overall, while we are positively surprised by Mudajaya’s strong job wins YTD, we continue to take a cautious stance on the company pending finalization of the fuel supply agreement between its 26%-owned associate RKM Powergen and Coal India Ltd. Maintain our NEUTRAL call for now, with unchanged FV of RM2.88, pegged at a 50% discount to our SOP valuation. The steep discount to the entire SOP value is due to a sizeable 80% of its earnings coming from the Chhattisgarh project.
Source: Kenanga
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