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Categories
| Affin maintains buy on MRCB |
| Business & Market 2009 | |||
| Written by -- | |||
| Tuesday, 28 April 2009 14:56 | |||
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“Even though MRCB’s stock price has rebounded further to RM1.13, up 117% from the October 2008 low of 52 sen, we see further upside from positive news flows on the award of contracts under the Bakun Energy Transmission Grid (BETG) as well as recovery in market sentiments,” Affin said in a note. It maintained a RM1.33 target price for MRCB, based on the valuation of its property assets, but went on to say that its revised net asset value (RNAV) is RM2.28 per share. The cabinet’s decision to proceed with the undersea power transmission cable project between Sarawak and Johor to supply at least 10,000MW of electricity from the RM6 billion Bakun hydroelectric project to Peninsular Malaysia “implies that the land-based transmission lines would be laid for what has been called the BETG”, Affin said. This, Affin added, was “good news for local transmission companies”, including MRCB’s 100%-owned Transmission Technology, which has a good track record with power transmission jobs for Tenaga Nasional Bhd. It also has expressed strong interest to tender for BETG jobs. “We understand the BETG includes 735km and 303km of HVDC (high voltage direct current) overhead transmission lines at 500kV in Sarawak and Peninsular Malaysia respectively costing around RM3 billion. As one of the two major power transmission players in the country, Transmission Technology is expected to secure a fair share of the contracts on its own or through joint-ventures when tender is called,” Affin said. MRCB fell seven sen to close at RM1.06 yesterday.
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