Friday, August 6, 2010

CIMB Research: Downside risk for Mudajaya limited

KUALA LUMPUR: CIMB Equities Research said MUDAJAYA GROUP BHD []'s share price has plunged 34% from the RM5.94 high it achieved on July 22, 2010'' to a low of RM3.92 on Thursday, wiping RM830 million from its market capitalisation.

'Working on the worst-case scenario of (i) no IPP component, and (ii) no EP profit in our CONSTRUCTION [] portion, we estimate that our RNAV would go down by 47% from RM9.92 to RM5.17, cutting our target price from RM7.94 to RM4.14 (unchanged 20% RNAV discount),' it said on Friday, Aug 6.

CIMB Research said if it just removed the IPP component but not the EP profits, RNAV would drop to RM8.16, leading to a target price of RM6.53. If only the EP profits for the construction component were removed, RNAV would drop by RM5.46, leading to a target price of RM4.37.


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