TRC good proxy to Klang Valley MRT, SCORE projects

KUCHING: TRC Synergy Bhd (TRC) has been viewed by analysts as a good proxy to the Klang Valley MRT and Sarawak Corridor of Renewable Energy (SCORE) projects.

The research arm of Public InvestmentBankBhd(PublicInvest Research) in a report yesterday highlighted that TRC is a good proxy to the Klang Valley MRT project and SCORE projects.

However, it believed that the group’s earnings have not yet stabilised yet.

“That said, the property division might give the necessary earnings boost which could be the rerating catalyst in the near term,” it added.

On the newly secured contract, PublicInvest Research explained TRC, via its wholly- owned subsidiary, Trans Resources Corporation Sdn Bhd, had accepted the award from Putrajaya Homes Sdn Bhd to construct houses in Putrajaya for RM53.9 million.

“Together with the recent building job, the group has thus far secured jobs worth circa RM114 million in this financial year.

“By assuming six per cent profit before tax (PBT), the job is expected to yield circa RM2.5 million of net profit over the construction period,” it said.

“We believe the new job will be completed within 12-month period and should start contributing to the group’s earnings in the near term,” the research firm viewed.

Overall, PublicInvest Research said, it kept its replenishment unchanged for the financial year 2015 (FY15) at RM500 million.

“With the two new jobs bagged, we estimate that the outstanding orderbook should be in excess of circa RM1 billion, which would underpin construction earnings for the next few years.

“Although positive, we are still wary of potential margin compressions from cost over-runs and possible delays due to recent site accidents,” PublicInvest Research observed.

All in, it maintained its ‘neutral’ call on the stock.