KUALA LUMPUR: MUDAJAYA GROUP BHD []'s share price rallied on Monday afternoon, Aug 9 following a positive report from CIMB Equities Research.
At 4pm, it was up 50 sen to RM4.50 with 11 million shares done.
The FBM KLCI was up 1.11 points to 1,361.56. Turnover was 532.89 million shares done valued at RM701 million.
CIMB Research is maintaining a Buy on Mudajaya Corp Bhd with a Target Price of RM7.94, which is pegged to an unchanged 20% discount to RNAV.
The research house said iit views positively management's efforts to confront investors concerns last Friday.
'We believe there are reasons to question the credibility, content and motive of the poison letter. The SC's indications of a speedy closure of this episode should also provide some comfort,' it said.
During last Friday's briefing, management dismissed the allegations made in the poison letter. Issues brought up were (i) the premium paid for the 26% JV stake (ii) the round-tripping of profits for the EP works of the power plant, and (iii) high profit margins expected from the EP works.
'This episode is not likely to jeopardise Mudajaya's existing bids, both locally and in India. Management also brushed aside speculation that the existing IPP is under investigation by the Indian government.
CIMB Research said the total value of investment for Mudajaya's equity stake is disproportionate to its 26% share in R.K.M Powergen but this appears to be justified by what R.K. Powergen brings to the table. The EP works are awarded to a subsidiary in Mauritius to take advantage of the tax-free regime.
At 4pm, it was up 50 sen to RM4.50 with 11 million shares done.
The FBM KLCI was up 1.11 points to 1,361.56. Turnover was 532.89 million shares done valued at RM701 million.
CIMB Research is maintaining a Buy on Mudajaya Corp Bhd with a Target Price of RM7.94, which is pegged to an unchanged 20% discount to RNAV.
The research house said iit views positively management's efforts to confront investors concerns last Friday.
'We believe there are reasons to question the credibility, content and motive of the poison letter. The SC's indications of a speedy closure of this episode should also provide some comfort,' it said.
During last Friday's briefing, management dismissed the allegations made in the poison letter. Issues brought up were (i) the premium paid for the 26% JV stake (ii) the round-tripping of profits for the EP works of the power plant, and (iii) high profit margins expected from the EP works.
'This episode is not likely to jeopardise Mudajaya's existing bids, both locally and in India. Management also brushed aside speculation that the existing IPP is under investigation by the Indian government.
CIMB Research said the total value of investment for Mudajaya's equity stake is disproportionate to its 26% share in R.K.M Powergen but this appears to be justified by what R.K. Powergen brings to the table. The EP works are awarded to a subsidiary in Mauritius to take advantage of the tax-free regime.
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