Kenanga Research starts coverage of Crest Builder, TP RM1.49

KUALA LUMPUR: Kenanga Investment Bank Research initiated coverage of Crest Builder Holdings with an Outperform call and a target price of RM1.49, which provides a total return of 48%.

It said on Monday the target price valuation was at a 10% discount to its FD sum-of-parts of RM1.67, inclusive of 55% discount on property.

"Crest Builder is at its inflection point, with rerating catalysts as it moves from its traditional construction business into the property development scene via its Prasarana-awarded redevelopment project of the Dang Wangi LRT station worth a gross development value RM1.0bil," it said.

Kenanga Research said this was the first major award from Prasarana's "rail-plus-property' projects involving a total 40-50 available mass rapid transit/light rail transit station sites.

The research house said it liked Crest Builder for its ability to secure such a catalytic project and it expects more to come, which will ultimately propel the company to greater heights as it rides on the Economic Transformation Programme play.

"We expect a three-year (up to FY14E) CAGR in earnings of 31%," it said.