This article first appeared in The Edge Financial Daily, on March 17, 2016.

TRC Synergy Bhd  
(March 16, 39.5 sen)
Maintain neutral with unchanged target price (TP) of 39 sen. TRC Synergy revealed that it might potentially nail more jobs this year, potentially from the mass rapid transit (MRT) Line 2 and light rail transit (LRT) Line 3 rail links, Pan Borneo Highway Sarawak, and other highways such as Suke and Dash. The competition will be stiff, with most contractors bidding for the same jobs. However, we believe the group’s experience in working on earlier phases of LRT/MRT projects could give it an added advantage. Financial year 2015 (FY15) was quiet in terms of job replenishments with only RM176 million worth secured. Separately, it announced that it secured a contract worth RM88 million for a subcontract to develop the new Kuala Lumpur Air Traffic Control Centre at Kuala Lumpur International Airport and other locations, which would increase its outstanding order book to RM1.2 billion. 

As for property, its Ara Damansara mixed-development project is to be deferred to end-2016, with the development order expected by the third quarter of calendar year 2016. The mixed development in Ara Damansara has a combined gross development value in excess of RM1 billion with the first phase estimated to be worth RM300 million.

Elsewhere, its property development project worth RM293 million secured in December last year could be launched by the second half of 2016. 

With the new job win, the group’s current outstanding order book is worth RM1.2 billion. 

As for construction progress of its jobs, we understand that the LRT and MRT jobs are mostly completed.  We assume a job replenishment rate of some RM500 million per year.  — Public Investment Bank Bhd, March 16