Hot Stock MMC surges 8% on HwangDBS "strong conviction buy" rating

Hot Stock MMC surges 8% on HwangDBS "strong conviction buy" rating
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Friday, 07 June 2013 11:45


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KUALA LUMPUR (June 7): Investors turned their attention to MMC Corp Bhd’s counter in the morning trade and effectively pushing up the engineering and CONSTRUCTION [] outfit shares by as much as 22 sen or 8.27%.

This surge in interest came after HwangDBS Vickers Research described MMC as “a high conviction buy” with a target price of RM4.95, up 37.5% from previously.

At 10:59 am, MMC became the third-largest gainer as it was up 16 sen or 6.02% to RM2.82 with a trade volume of 2.28 million.

In a note yesterday, HwangDBS analyst Chong Tjen San said the lack of large-cap liquid infrastructure stocks apart from GAMUDA BHD [] and IJM Corp Bhd makes MMC stand out as a strong proxy.

“We think the market will start looking for new large-cap ideas to continue to ride on the buoyant infrastructure and Iskandar Malaysia themes. With Gamuda and UEM Land Holdings Bhd have already been rerated and over-owned, interest should filter down to MMC,” said the analyst in the note.

Chong said while the appetite for Malaysian infrastructure stocks have picked up, MMC shares were only up 2% year-to-date while Gamuda shares have been up by 35% in the same period.

“This is not justified given its market cap of US$2.5 billion (RM7.71 billion), decent trading liquidity, order book of RM4 billion and strong pipeline ahead,” he said.

Chong also pointed out MMC has little foreign shareholding, specifically 6.9% while Gamuda’s stood at 45%.

“With the elections behind us, the substantial overhang on Tan Sri Syed Mokthar Albukhary-related stocks is now removed,” he added.