KUCHING: TRC Synergy Bhd (TRC Synergy) is eyeing for more infrastructure projects to replenish its order book after securing a package of the Mass Rapid Transit Line 2 (MRT2) project recently.
The research arm of Public Investment Bank Bhd (PublicInvest Research) in a report yesterday said it believed the group was still eyeing projects which among others the Light Rail Transit Line 3 (LRT3) in the Klang Valley and the Pan Borneo Sabah Highway.
This comes as TRC Synergy’s wholly-owned subsidiary, Trans Resources Corporation Sdn Bhd has successfully clinched a contract worth RM858.2 million, the second largest contract in the final viaduct tender award by Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) for MRT2.
The company has secured the V205 package which is for the construction and completion of the viaduct guideway and other associated works from Kampung Muhibbah to Serdang Raya.
The section will be the group’ first viaduct package as it was involved in depot and ancillary works in Mass Rapid Transit Line 1 (MRT1) previously.
On another note, PublicInvest Research was positively surprised by the latest development by the company on getting a work package of MRT2 in particular the amount although it believed that TRC Synergy could be a beneficiary of planned rail projects in Malaysia.
With the latest contract award, the research firm believed the company has the ability to compete with other construction companies in getting a slice of the jobs from MRT Corp as there was concern over the cancellation of a small project by MRT Corp late last year.
As such, PublicInvest Research has made adjustment for its order book replenishment rate for TRC Synergy from RM500 million to RM1 billion this year.
At the same time, the research firm also revised its earnings forecast for TRC Synergy’s FY17-FY19 earnings upwards by four per cent, seven per cent and 28 per cent respectively.
With the new contact win, the group’s outstanding order book was estimated to be at RM1.8 billion, ensuring earnings visibility for the next two to three years.
Similarly, the research firm was bullish on the outlook of the construction firm, valuing the company’s share price with a fair value of 59 sen per share based on unchanged estimated price-earnings ratio (PER) of 10 times pegged to FY18 ending December 2018.