The lower gearing of Malaysian Resources Corporation Bhd (MRCB) has provided more chances to acquire a new land bank for future growth, according to Kenanga Research.
“The successful rights issue, which raised RM514 million (S$212.7 million), lowered net gearing to 0.3 times from 1.25 times. It has also positioned the company to acquire a new land bank for future growth or invest in infrastructure concessions,” it said.
In a separate note, OSK Research said that the potential acquisition of federal land could provide further re-rating of the share price of MRCB from RM1.63 per share.
OSK had previously quoted the target price of MRCB at RM1.54. The research house also said that it expects the company to achieve an overall strong performance this year.
As for the financial result in 2009, Kenanga said it was mainly due to the continuous strong profit contribution and construction and property revenue.
For the year ended 31 December 2009, MRCB posted a pre-tax profit amounting to RM46.492 million against a pre-tax loss of RM42.155 million it incurred in the previous fiscal year.
Revenue increased from RM788.552 million previously to RM921.616 million.
Kenanga is maintaining the RM56.6 million net profit forecast of MRCB for its financial year ending 31 December 2009 and estimates the company will yield a net profit of RM80.9 million in 2011.