STOCK FOCUS OF THE DAY
MRCB : Wins German Embassy land bid BUY
We maintain BUY on MRCB with an unchanged fair value of
RM2.30/share. MRCB announced that its wholly-owned unit MRCB Land has entered
into a sale and purchase agreement with the government of The Federal Republic
of Germany for the acquisition of the German Embassy land for RM259mil. The
land is strategically located at Jln Kia Peng within the KL city centre.
At RM259mil, the acquisition price translates into an
implied land cost of ~RM3,188psf. While this translates into a ~6% premium to
the market value of the land based on appraisals conducted by independent
valuers, we believe the project’s merits are anchored by its strategic location
and possibly, an attractive plot ratio.
MRCB will pay 10% of the purchase price (RM25mil) on or
before the execution of the SPA. The balance 90% will be paid within three
months from the SPA’s completion date. Based on news reports, the project could
kick off early next year with an indicative GDV of ~RM1.3bil. Based on our
initial estimates, this could lift MRCB’s NAV by ~3% (FY16F-17F net profit up
by 1%-2%). Pending more details, we nevertheless maintain our earnings forecast
for now.
The latest development reaffirms our conviction of MRCB’s
increasing penetration as an urban property developer. Just last week, the group
entered into several agreements with DMIA (M) Sdn Bhd to take full control of
the Lot 349 development in Brickfields in return for relinquishing its
potential role in the double tracking works from Rawang to Salak Selatan and
Salak Selatan-Seremban-SPK Pelabuhan Kelang.
MRCB will also receive RM39mil from the sale of its 70%
stake in the 25-acre Salak South project for RM15mil plus another RM15mil in
advances to be recouped from DMIA. The completion of its proposed disposal of
Platinum Sentral to Quill Capita Trust for RM740mil is another catalyst to look
out for in the near term.
Others :
Economic Update : Reserves of BNM fall on
weaker-than-expected Ringgit in March
NEWS HIGHLIGHTS
Malayan Banking : LCR at comfortable level
Media Sector : News department not a requirement for ABN’s
TV license
Property Sector : RM800mil GDV for Ewein’s project in Penang
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