CIMB Research downgrades Mudajaya to Hold, cuts target price to RM2.52 by CIMB

CIMB Research downgrades Mudajaya to Hold, cuts target price to RM2.52 KUALA LUMPUR (May 28): CIMB Research has downgraded Mudajaya Group Bhd to Hold (from Add) at RM2.54 with a lower target price of RM2.52 (from RM3.19) and said Mudajaya's annualised 1Q14 core net profit made up 59% of house full-year forecast and 61% of consensus. In a note May 27, the research house said the results were below expectations as 2H could be weak due to delays in its Indian IPP and depletion of order book. Analyst Sharizan Rosely said he was negatively surprised that Mudajaya was no longer keen on the Track 3A power plant civil works job. He said other power plant jobs were in the pipeline but the only possible win this year could come from the WCE. “We slash our FY14-16 EPS forecasts by 15-44% and cut our target price by 21%, still based on a 40% discount to RNAV. “Its longer-term prospects still look good, but we think that its medium-term outlook is unlikely to be exciting, thus weighing on its share price. “We downgrade our call from Add to Hold. Switch to IJM Corp,” said Sharizan.