Latest news with #RM2.94bil
The Star
21-05-2025
- Business
- The Star
Shah Alam project bolsters MRCB earnings
PETALING JAYA: The RM2.94bil Shah Alam Sports Complex project awarded to Malaysian Resources Corp Bhd (MRCB) by Menteri Besar Selangor Inc solidifies the company's engineering and construction expertise in large-scale public infrastructure, according to MIDF Research. It said this project builds on MRCB's track record from the successful delivery of the KL Sports City redevelopment in 2017. 'This latest undertaking is expected to enhance MRCB's technical standing, especially in public-sector and sports-related infrastructure,' the research house said, noting that this would be the company's fourth major contract in 2025. It added that projects won by MRCB this year would bolster the medium-term earnings visibility and reinforces confidence in the company's ability to consistently replenish its order book, where the construction order book stood at RM26.1bil as at end-December 2024. For this year, the order book has grown to RM6bil. As the contract sum for the project would be settled via a combination of cash and land, MIDF Research expects that the land swap, to be capped at RM200mil and subject to mutually agreed valuation, could present future upside in replenishing the company's property development inventory and support earnings. MRCB's landbank gross development value (GDV) stood at RM37.8bil as at end-December 2024, with additional parcels such as land in Cyberjaya still pending GDV confirmation. MIDF Research has maintained a 'buy' recommendation on the stock and maintained target price for the shares at 56 sen. It has kept its earnings forecast unchanged pending the release of the company's first quarter ended March 31, 2025 results to be released on May 30. It noted that together with the projects awarded this year and the reinstatement of five LRT stations, the latest project underscores the recommendation.
The Star
20-05-2025
- Business
- The Star
Latest MRCB project win lifts order book closer to RM6bil
PETALING JAYA: The announcement that Malaysian Resources Corp Bhd (MRCB) has been awarded the contract to build the Shah Alam Sports Complex brings the property and construction company's order book closer to the RM6bil target for this year, analysts say. The contract from Menteri Besar Selangor Inc (MBI) was announced last Friday. The project value of RM2.94bil exceeded the company's earlier guidance of RM1.5bil as the scope of work has widened and takes MRCB's order book to RM5.4bil. Analysts at Hong Leong Investment Bank Research (HLIB Research) and CIMB Research have maintained their 'buy' calls on the stock, with target price of 67 sen and 83 sen, respectively. HLIB Research said MRCB's total year-to-date order book far exceeded its assumption of RM4bil for this year and now expects the order book to rise to RM6bil with core profit after tax and minority interest tweaked by minus 0.9% for this year and 2.5% for 2026 while expecting earnings of RM88.7mil for 2027. The research house said management anticipates a pre-tax profit margin of 5% from the project with financing costs baked into the contract value. Terms of payment for the 48-month project would be through a land swap not exceeding RM200mil subject to agreement, with the remainder in cash. MRCB's management shared that the payment would be on deferred basis. HLIB Research said the deferred payment would likely result in the company having a higher net gearing that currently stands at 0.27 times. It said MRCB would likely manage its balance sheet through asset disposals to free up cash while there could be the potential conversion of the KL Sentral redevelopment project later this year that may boost the order book to beyond the RM10bil mark. CIMB Research said, given the highly specialised nature of the project, the contract could fetch a fairly attractive operating margin of between 5% and 8% minus financing costs with minimal execution risk given MRCB's track record. Construction is scheduled to begin in November for a targeted completion in 2029. The research house said that the three-fold increase in the contract value comes with a far lower funding risk as most of the construction work would be paid in cash apart from the 7% to be paid through a land swap versus the initial value to be paid entirely through a land swap. The research house said MRCB also has sufficient balance-sheet headroom and the option to monetise non-core assets if needed. CIMB Research said, despite MRCB's year-to-date project wins meeting 90% of the company's order book target of RM6bil, it was maintaining its earnings forecasts for now pending the detailed design and project specifications expected in six months time.
The Star
16-05-2025
- Business
- The Star
MRCB to construct RM2.94bil Shah Alam Sports Complex
KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) via a sub-subsidiary has accepted a contract from the Selangor state government to construct the Shah Alam Sports Complex (KSSA). In a statement, the group said Lembaran Prospek Sdn Bhd, a unit of MRCB Land Sdn Bhd, which is in turn a wholly-owned subsidiary of MRCB, signed the RM2.94bil contract with Menteri Besar (Incorporated) (MBI). The construction project includes the demolition works of the old Shah Alam stadium, which are currently nearing completion. Slated for completion in 2029, the project will span a 48-month period and tansform the sports complex into a new economic, social and environmental landmark in Selangor. "The KSSA development represents a bold transformation of Shah Alam into a vibrant, multi-functional urban precinct that reflects the shared vision of the State's leadership and MRCB's expertise in integrated urban developments," said the statement. Anchored by a 45,000-capacity stadium with a retractable pitch, the project will integrate community, commerce, and infrastructure across a 310,000m² green flora sanctuary. According to MRCB, the stadium, which was previously utilised less than 30 times a year, mainly for football matches, will be redefined as a dynamic, year-round destination. "We are humbled to be entrusted with delivering this visionary project for the State of Selangor,' said MRCB chairman Datuk Nasir Mohd Nasir Ab Latif. 'With our proven track record in urban regeneration and sustainable infrastructure, we are committed to building more than a stadium, we are creating a living, breathing destination for the people of Selangor.'
