MRCB most active amid HSR project news

KUALA LUMPUR: Malaysian Resources Corporation Bhd (MRCB) share price was higher this morning, rising 8.62 per cent, following the news over the property developer’s participation in the Kuala Lumpur-Singapore high-speed rail (HSR) project.

At 9.47 am, MRCB rose five sen to 63 sen with 83.66 million shares changing hands. It was the most actively traded stock.

It was reported that Berjaya Rail Sdn Bhd (BRail), 70-per-cent-owned by Berjaya Land Bhd has partnered MRCB, IJM Construction Sdn Bhd, and Keretapi Tanah Melayu Bhd (KTMB) to bid for the HSR project.

RHB Investment Bank Bhd, in a note, said it believed such an arrangement for a consortium is apt for the concept proposal under the project’s request for information (RFI) exercise.

MRCB’s rail credentials — Mass Rapid Transit (MRT) 2 and Light Rail Transit (LRT) 3 — in addition to its role in redeveloping KL Sentral, seem timely with HSR’s potential rollout.

“If the HSR passes through KL Sentral, the redevelopment of KL Sentral could take place concurrently with the HSR.

“IJM could focus more on rail electrification works via its 44.8 per cent acquisition of Pestech International,” it said in a note.

Another contender, YTL Corporation, also saw its shares on the uptrend this morning, advancing nine sen to RM2.46 with 12.3 million shares transacted.

YTL Corp has also reportedly submitted a concept proposal for the HSR project.

“This is not a surprise as the group was the project delivery partner in a partnership with Tabung Haji Properties for the southern section of the HSR’s previous alignment in 2018.

“With the RFI still being in its early days (a detailed proposal stage will follow the concept proposal stage post-evaluation by the authorities), various types of permutations could still take place before a final structure is decided.

“Therefore, a similar structure to that seen in 2018, whereby HSR packages were divided into the northern and southern sections, cannot be ruled out,” it said.

Aside from the HSR catalyst, RHB Investment Bank believed MRCB’s pre-qualified status for a flood mitigation project, estimated at RM500 million to RM1 billion in Selangor, could see further developments by the first half of 2024, given the urgency to manage floods in the country.

The research house said other prospects might come from MRT3. It thinks MRCB has a chance to secure the elevated section, while the reinstatement of five LRT3 stations might also benefit MRCB, the main contractor for the ongoing construction of the 20 initial stations.

RHB Investment Bank maintains its ‘Buy’ recommendation with a higher target price of 74 sen from 52 sen previously. – Bernama