PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) is expected to experience an earnings rebound in financial year 2026 (FY26) underpinned by contributions from its light rail transit line 3 (LRT 3) phase two contract and progressive conversion of other higher-conviction bids.
A quick recap on its latest financial performance, MRCB’s net profit slumped to RM629,000 in the fourth quarter ended Dec 31, 2024 (4Q24) from RM80.23mil in the same quarter of the preceding year.
Its revenue also was cut by nearly half to RM370.72mil during the quarter.
Cumulatively, the group closed lower in FY24 at a net profit of RM63.67mil and a revenue of RM1.65bil.
Coming in below its expectations, CIMB Research said the group’s revenue was affected by several factors.
This includes lower property development billings, the disposal of Menara CelcomDigi and Plaza Alam Sentral during the previous year, as well as the near completion of LRT 3 Phase 1 works.
On a more positive note, the research house said MRCB is eyeing RM6bil worth of job opportunities after bagging the latest LRT 3 Phase 2 contract.
MRCB had secured the RM2.47bil-worth project from Prasarana Malaysia Bhd, via its wholly-owned subsidiary Setia Utama LRT 3 Sdn Bhd.
Beyond the latest win, it is noted that MRCB is currently in advanced negotiations for the KL Sentral and Shah Alam stadium redevelopment works, which is worth RM2bil to RM3bil, as well as opportunities under the large scale solar Petra 5+ programme.
“The group is also tendering for RM1.6bil worth of jobs and has been pre-qualified for several flood mitigation and water infrastructure projects.
“Altogether, the group is looking to crystallise up to RM6bil worth of new contracts for FY25,” said CIMB Research.
As the group moves into FY25, MRCB is said to have set a higher property sales target of RM1bil.
“This was following last year’s sales, which amounted to RM836mil worth of new properties sold in FY24.
The research house noted that the new target is underpinned by RM3.9bil worth of new property launches in FY25, namely The Symphony Centre, Bledisloe House and Maris – 20 Queen Street in Australia, as well as Lot R of Kolektif, Bukit Jalil Sentral Phase 1A and 1B, 9 Seputeh – Parcel A and PJ Sentral Tower 5 in Malaysia.
That being said, despite the slump in performance, the research house decided to maintain its “buy” call on MRCB with a lower target price of 83 sen per share.
The valuation was made after “cutting our forecasts for the group’s FY26 and FY27 core profit by 40% and 21%, respectively, and implementing minor housekeeping tweaks post release of its FY24 results”.
“Nevertheless, we expect material contributions from the LRT 3 Phase 2 contract — alongside the progressive conversion of other higher conviction bids — to underpin a rebound in FY26 core profits to RM68mil, rising further to RM108mil in FY27,” it added.
