CIMB positive on MRCB-Nusa Gapurna deal

Malaysian Resources Corporation Bhd's (MRCB) proposed deal with Nusa
Gapurna Development Sdn Bhd, which includes the injection of the
latter's 13.33 hectares of prime land with a total gross
development value (GDV) of RM5.7 billion, is positive on several fronts.

CIMB
Research said the main plus point was that it addressed MRCB's
depleting landbank for its Kuala Lumpur (KL) Sentral project, which
will be fully completed in 2014.

It said the key project was the
Petaling Jaya Sentral Garden City of Lights, which will be developed
into a commercial and office hub similar to KL Sentral and expected to
generate a GDV of RM2.9 billion for phase one over the next four to
five years.

"MRCB's order book will also increase from internal jobs," CIMB Research said in a note.

In addition, it said MRCB had a fair chance of securing jobs under the Economic Transformation Programme.

It
said the potential projects included the MRT 2 and 3 and freight rail
upgrade works in the Klang Valley, for which MRCB had reportedly
received the letter of intent.

Meanwhile, it said the
government's move to takeover MRCB's 100 per cent-owned Eastern
Dispersal Link in Johor would proceed now that the elections were over.

"We expect the deal to at least be at break-even levels to go through," it added.

CIMB
Research has placed an 'outperform' call on the stock and raised its
target price to RM1.90 from RM1.33 previously.-- Bernama