MONEY MASTER

Retain outperform with target price (TP) of RM1.85 Macquarie Equities Research (MQ Research) released a report on Malaysian Resources Corporation Berhad (MRCB) following the company’s third quarter result (3Q16). MQ Research maintains Outperform on MRCB and considers MRCB as its top pick in the Malaysian property sector as well as in the ASEAN Emerging leaders. Event MRCB reported its 3Q16 results on 30 November 2016. MRCB's cumulative 9M16 rep. PAT registered at RM79mn (-74% y/y); this is 67% of Macquarie's FY16E estimates and 72% of consensus FY16E forecasts. On the quarterly results, 3Q16 rep. PAT jumped 564% y/y to RM29mn due to the rise in revenue by 47% y/y to RM551mn. Earnings were weaker in 9M16 due to the RM279mn gain recorded from MRCB's asset disposal program in 9M15.   Impact Property division to lift earnings in 4Q16. MRCB's shareholders approved the resolution to dispose the Menara Shell at RM640mn, during an extraordinar...

Downgrade to SELL with lower target price (TP) of RM0.68 Review Excluding the disposal gain of c.RM80mn (net) and a one-off grant of RM26.3mn, Glomac’s 1HFY17 normalised net profit of RM4.9mn came in below expectations. It only accounted for 8% of both ours and consensus’ full-year forecasts. The variance was largely due to 1) lower-than-expected revenue, and 2) weaker-than-expected property margin. Glomac’s 1HFY17 headline revenue and PBT grew 25% and 140% YoY to RM335.4mn and RM143.5mn respectively. However, normalized revenue and PBT would have declined by 29% and 80% YoY after adjusting for the impact of land disposal (Cheras land sale to PR1MA for RM145.6mn announced in Oct-15) and one-off grant received for upgrade and improvement of infrastructure surrounding Glomac Damansara development amounting to RM26.3mn. The poor results were attributable to slow progress billing as its previous key contributing projects are nearing completion or have completed during the per...

Maintain BUY with higher target price (TP) of RM2.66 Results Kimlun reported 3QFY16 results with revenue coming in at RM224.2m (-9% QoQ, -7% YoY) and earnings of RM16.5m (-32% QoQ, -16% YoY). Cumulative 9M earnings totalled RM57.7m, increasing +17% YoY. Deviation 9M earnings made up 84% of our full year forecast (77% of consensus) which is above expectations. The stronger than expected results was attributed to the manufacturing division which enjoyed superior gross margins of 32% for the 9M period vs 24.8% last year. This was due to (i) stronger SGD against MYR and (ii) higher proportion of MRT deliveries last year which generally commands a lower margin. Dividends None declared. Highlights Orderbook remains healthy. Kimlun’s orderbook currently stands at RM2.1bn comprising RM1.8bn for construction and RM280m for manufacturing. Overall, this translates to a healthy cover ratio of 2x on FY15 revenue. Bags MRT2 TLS contract. Kimlun announced t...