MRCB, Gamuda up on bid as PDP for KL-Singapore HSR project

MRCB, Gamuda up on bid as PDP for KL-Singapore HSR project

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KUALA LUMPUR (Nov 29): Shares in Malaysian Resources Corp Bhd (MRCB) and Gamuda Bhd rose in early trade this morning after the companies collaborated to bid for the role of project delivery partner (PDP) for the Kuala Lumpur to Singapore High Speed Rail (KL-Singapore HSR) project.

At 9.03am, MRCB rose 1.98% or 2 sen to RM1.03 with 663,700 shares traded, while Gamuda added 0.65% or 3 sen to RM4.65 with 21,000 shares done.

Both parties entered into an agreement yesterday to set up an unincorporated consortium on a 50:50 basis to participate in the tender.

“Upon securing the tender, the parties shall enter into a definitive agreement to further set out the rights and obligations of each party in relation to the project,” MRCB said.

The PDP tender was called by MyHSR Corp on Nov 22.

Meanwhile, CIMB IB Research upgraded MRCB to “Add” at RM1.01 with a higher target price (TP) of RM1.19 (from RM1.06) and said MRCB announced that it is forming a JV with Gamuda Bhd to bid for the KL-Singapore HSR project’s PDP scope (RM25 billon-RM40 billion by house estimates).

In a note today, the research house said this is a positive surprise, more so for MRCB.

“Partnering with Gamuda for the HSR PDP is an added advantage given Gamuda’s PDP credentials for two MRT jobs.

“Potential earnings impact from securing HSR’s PDP scope could be substantial; more significant compared to the existing PDP earnings of MRCB-George Kent JV.

This news could revive sentiment on the stock. Upgrade to Add, with a higher TP,” it said.