RHB Research Institute has reduced the fair value of TRC Synergy Bhd by 12% from 96 sen to 85 sen but is maintaining its Outperform on the stock.
It said on Monday the company is going all-out for work packages for the Sungai Buloh-Kajang (SBK) Line of Klang Valley MRT project but will stick with its stance of not unduly compromising on margins.
"In the immediate term, TRC does not expect significant expansion in construction margins as construction earnings will predominantly be underpinned by two key contracts, that is LRT line extension and Brunei airport that command relatively lower margins," it said.
RHB Research said on a brighter note, the recent soft launch of TRC's gated and guarded property project called Ukay Tropika in the Ulu Klang area with a gross development value of RM90mil was a runaway success.
"FY12-FY14 net profit forecasts cut by 8-14%, having reflected lower blended construction EBIT margins of 6.6%-7.4% (8.6%-8.8% previously), partially cushioned by contribution from Ukay Tropika," it said.
Source: www.thestar.com.my
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