According to HLIB Research, TRC Synergy is a strong contender for the MRT3 project as it has a bumiputra contractor status with a G7 licence by the Construction Industry Development Board.
PETALING JAYA: TRC Synergy Bhd
’s earnings could pick up strongly from financial year 2024 (FY24) onwards on potential contract wins from the upcoming Mass Rapid Transit 3 (MRT3) project.
While earnings could still be uninspiring in FY22 and FY23, Hong Leong Investment Bank Research (HLIB Research) said this could grow by some 30% in FY24.
“We have factored in construction contract wins of RM800mil in FY22 as well as RM500mil in both FY23 and FY24. However, billings recognition will only pick up meaningfully starting from 2024.
“For the period of FY22 to FY24, our forecast suggests a compounded annual growth rate of 5.9%,” it said.
According to HLIB Research, TRC Synergy is a strong contender for the MRT3 project as it has a bumiputra contractor status with a G7 licence by the Construction Industry Development Board.
It also has an extensive track record in earlier railway projects for stations, viaducts and depots.
The company also has a healthy balance sheet, while its market capitalisation trades at approximately a 15% discount to its net cash position levels, it said.
“We believe the market has ascribed a negative value to TRC Synergy’s real estate assets which we think is unwarranted,” HLIB Research said. On its property assets, it said its foreign assets may have compounded its share undervaluation.
