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Wednesday, May 6, 2009

MRCB rises on winning RM239m jobs

MALAYSIAN Resources Corp, a property developer and builder, rose to an 11-month high after RHB Research Institute Sdn Bhd said the company won two building contracts valued at RM239 million (US$68 million).

The shares advanced 3.3 per cent to RM1.25, the highest close since June 17. The stock has surged 78 per cent this year, making it the third best performer on the benchmark Composite Index.

“The key new jobs and internal work will underpin construction profits,” RHB said in a report today. RHB increased its target price on the stock to 86 sen from 69 sen, maintaining its “underperform” rating.

The contracts are the first building jobs the company has secured so far this year, increasing its order book to RM2 billion, RHB said.

It raised its profit forecast by 34 per cent for 2010 and 36 per cent for 2011 to reflect higher earnings from construction. Malaysian Resources reported a RM39.3 million loss in the fourth quarter of last year as sales slid.

One of the projects include upgrading a road network of Kuala Lumpur Sentral, which comes under the government’s stimulus package, RHB said. The government unveiled RM67 billion of stimulus measures to help revive economic growth.

Malaysian Resources is the builder of Kuala Lumpur Sentral, Malaysia’s biggest bus and rail transport hub, where it is also constructing offices and condominiums.

The other contract is the “rehabilitation” of a condominium project, the report said.

The company also secured a key tenant for its 40 per cent- owned 348 Sentral, a RM650 million office and serviced apartment project, RHB said. The foreign oil company took 80 per cent of the total office space there, the report said.

Malaysian Resources managing director Shahril Ridza Ridzuan didn’t answer calls to his mobile phone or immediately respond to a text message.

By Bloomberg

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