PETALING JAYA: While Malaysian Resources Corp Bhd’s (MRCB) recently concluded land swap deal reflects proactive asset monetisation and strategic land banking, the immediate financial impact remains limited to a disposal gain of about RM22mil in the financial year 2025 (FY25).
MIDF Research said the recent land disposal and acquisition agreements align with MRCB’s long-term strategic initiatives and are within expectations.
Nonetheless, the actual effects of the proposed acquisition on earnings and consequently earnings per share for subsequent financial years will depend on earnings contribution from the development of the project land.
“Thus, FY26 and FY27 earnings are subject to further details and clarification from management,” the research house said in a report yesterday.
Earlier this week, MRCB announced that it will be disposing of its 70% equity interest in CSB Development Sdn Bhd (CSBD) to Cyberview Sdn Bhd for a total cash consideration of RM219mil.
CSBD owns six parcels of commercial land in Dengkil and Cyberjaya, with a recent market valuation of RM365.5mil.
At the same time, MRCB is also acquiring seven parcels of commercial and industrial land within the Cyberjaya City Centre from Cyberview for RM287.8mil. The land parcels have an estimated market value of RM288.3mil.
“This strategic swap allows MRCB to consolidate its land ownership in the prime development zone of Cyberjaya, enabling more comprehensive master planning for future mixed developments.
“The transactions position the group to leverage stronger value creation opportunities, ensuring sustained earnings contributions from high-quality projects over the medium to long term,” MIDF Research said.
Moreover, the transactions will be internally funded and do not significantly alter gearing ratios or net asset value.
“The proceeds from the disposal will be primarily utilised for working capital and to defray property development expenses over the next 12 months, enhancing cash flow flexibility,” the research house said.
MIDF Research said the new acquisitions represent significant opportunities for MRCB, providing strategic landbank enhancement and underpinning its long-term growth potential in integrated developments. “The acquired parcels are well-positioned with connectivity to Putrajaya and Kuala Lumpur, ensuring strong demand potential for future developments,” the research house said.
MIDF Research also noted that while standard property development risks like delays, approvals and competition remain, MRCB should be able to mitigate these concerns given its extensive experience, established relationships, and effective project management.
“The strategic positioning and phased development approach adopted by MRCB further reduce execution risks associated with these large-scale projects,” the research house said.
MIDF Research maintained a “buy” for MRCB with a target price of 56 sen and maintained its earnings estimates following its previous downward revision of earnings for FY25 and FY26 by 18.4% post the fourth quarter FY24 results.
