KUALA LUMPUR (Sept 30): Mega First Corporation Bhd (MFCB) shares were among the top gainers at mid-morning on Tuesday after PublicInvest Research initiated coverage on the stock with an Outperform call and SOP-derived fully diluted target price of RM3.85.

At 10am, MFCB rose 32 sen to RM2.66 with 1.82 million shares done.

In a note Tuesday, the research house said given MFCB’s steady recurring income from the power business coupled with decent earnings prospects from its resources arm, the company’s investors get both businesses for nearly free at current share price.

“Based on our SOP valuation, we see deep underlying value in the company.

“Further potential re-rating catalysts include i) stronger-than-expected production growth for the resources business, ii) renewal of concession for the power business in China and Sabah and iii) completion of its hydropower project in Laos by 2019, which will be the growth driver for the Group in the next couple of years,” it said.

PublicInvest said it sees deep underlying value in the company as it could be worth close to RM1 billion.