Stock Focus Crest Builder falls 1% despite Kelana Jaya LRT project

by **Cals** Mon 23 Dec 2013, 12:03

Stock Focus Crest Builder falls 1% despite Kelana Jaya LRT project

Business & Markets 2013

Written by Jeffrey Tan of theedgemalaysia.com

Monday, 23 December 2013 11:07

KUALA LUMPUR (Dec 23): Crest Builder Holdings Bhd fell as much as 1% in morning trades despite the construction and engineering firm announcment it will undertake a planned RM1 billion mixed property development at the Kelana Jaya LRT station.

Last week, Crest Builder announced it will undertake the project via a joint venture (JV) with land owner Syarikat Prasarana Negara Bhd (Prasarana).

At 10.51 am today, the firm declined 3 sen or 2% to trade at RM1.50. Crest Builder saw trades of some 206,000 shares done.

Bloomberg data show the firm lost a market capitalisation of RM4.8 million, down to RM239.6 million from RM244.3 million.

According to a dealer, the decline in Crest Builder’s share price could be due to profit taking after the announcement of the proposed JV development.

“The decline in share price is due to profit taking,” said the dealer, adding the firm’s fundamentals are intact.

In a note today, Kenanga Research said it was surprised as it did not expect the firm to win another Transit Oriented Development (TOD) project from Prasarana. It said this is the second JV development project with Prasarana.

The Kenanga Research team said: “We are positive with the project in the long-term as it would provide better earnings visibility for Crest Builder as we expect the earnings accretion for this project from FY16 onwards.”

“Maintain ‘outperform’ for the stock at RM1.53 with unchanged target price of RM1.73. No changes to our earnings estimates as well.”

The research team said the proposed JV development would not have any impact to Crest Builder’s net gearing level of 1.2 times as of 9M FY13.

The construction works for the project is expected to take off late next year, it added.