23 April 2012
Recent worries over coal supply agreement for Mudajaya Indian IPP unjustified, full cost pass-through mechanism intact - CIMB Research
CIMB Equities Research said recent worries over the coal supply agreement for Mudajaya's Indian independent power producers (IPP) are unjustified as the fuel supply agreement will be inked soon and the full cost pass-through (FCPT) mechanism is intact.
“We continue to value the stock at a 40% discount to RNAV. We like Mudajaya for its order book replenishment prospects and recurring income from its Indian IPP. Maintain Trading Buy given the likelihood of project wins in the near term,” it said on Monday.
CIMB Research said investors should accumulate on weakness.
It added the share is down 18% from its March 14 high of RM3.20. TRC's CY12-13 price to earnings of 4.0 times to 5.0 times are the cheapest in its construction universe.