Construction Sector - Three more MRT station jobs awarded Overweight

- MRT Corp announced on its website yesterday that it has awarded three more station packages for the proposed Sg.Buloh-Kajang line. 

- TRC won package S1 for the construction of elevated stations and other associated works at Sungai Buloh, Kampung Baru Sungai Buloh and Kota Damansara. The estimated value of the contract is RM283.7 mil.

- Ahmad Zaki Resources Bhd (AZRB) won a similar contract for Package S6 for Taman Suntex, Taman Cuepacs and Bandar Tun Hussein Onn for RM175mil. These stations would be located along the viaduct between Plaza Pheonix and Bandar Tun Hussein Onn – where AZRB is also the turnkey contract for the viaduct package V6. 

- The third contract, Package S7, was won by Apex Communication Sdn Bhd. The tender is valued at RM104.7 mil.

- These three station packages are under the bumi category. Taken together with another two packages – S4 (won by Naim Holdings) and S5 (won by IJM Corp) – five out of the eight elevated station packages have already been awarded.

- The remaining three station packages that are still up for grabs consist of two under the bumi category (S2: Taman Industry Sg.Buloh, PJU 5, Dataran Sunway and S8: Saujana Impian, Bandar Kajang, Kajang) and another for the open category (S3: The Curve, One Utama, TTDI).        

- With these, we estimate that 40 out of the 85 packages worth ~RM15.8bil have already been awarded.   

- We maintain our view that 95% of the SBK line contracts will likely be awarded by year-end. The major contracts remaining include:- (i) Package v8 (Taman Mesra-Kajang); (ii) the RM1.6bil rolling stock package; and (iii) the remaining three station packages. 

- We gather that three parties have submitted bids to supply rolling stock – i.e. Changchun Railways Vehicle Co Ltd, Siemens SMH Rail Consortium and CSR Zhuzhou Electric Locomotive Co Ltd.

- While competition for the remaining packages remains intense, it was reported that Malaysian Resources Corp Bhd (MRCB) could be awarded the final viaduct package v8 sometime this week. On the other hand, we believe WCT Bhd could still be in the running for the last remaining station jobs under the open category.

- Likewise, we also expect investor expectations to slowly gravitate towards the suppliers of building materials, particularly with the multi-year supply prospects for cement and steel. We continue to advocate Ann Joo Resources (steel), Lion Industries (steel), Lafarge Malayan Cement (cement), IJM Corp (via ICP: concrete-based products) and KimLun Corp (tunnel lining, segmental box girdles).

Source: AmeSecurities