Saturday 30 Sep 2023
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KUALA LUMPUR (Sept 19): TRC Synergy Bhd saw the biggest increase in share price on Friday among all construction stocks which are touted to be the beneficiaries of the upcoming highways to be constructed next year, in which Works Minister Datuk Fadillah Yusof said RM20 billion worth of jobs will be dished out.

While the highways will give construction players such as TRC Synergy, IJM Corp Bhd, WCT Holdings Bhd, Mudajaya Group Bhd, Bina Puri Holdings Bhd, and Ahmad Zaki Resources Bhd (AZRB) a huge boost in their order books, analysts said investors have already priced in the projects.

TRC Synergy was up by 1.5 sen or 2.97% to 52 sen at 2:45 pm with 509,300 shares changing hands. Mudajaya also gained three sen or 1.48% to RM2.06 with a trading volume of 820,600. It was earlier traded to a high of RM2.07.

Bina Puri, which has been shortlisted for Kinrara-Damansara Expressway (Kidex), was traded one sen or 1.52% higher at 67 sen, with a total 121,200 shares swapping hands. Its intraday high was 67.5 sen.

However, IJM, which is the contractor for West Coast Expressway (WCE), was pushed down by one sen to RM6.48 with 1.32 million shares traded. AZRB also ceded half a sen or 0.66% to 75.5 sen with 731,900 shares traded.

Meanwhile, WCT only reached an intraday high of RM2.12, up 0.47% from yesterday’s close of RM2.11, but was flat at 2:45 pm. A total of 167,600 shares changed hands.

Yesterday, Fadillah told reporters that works on seven new highways will begin next year. Those highways are Duta-Ulu Kelang Expressway’s (DUKE) extension works, Kidex, WCE, KL Outer Ring Road (KLORR), Sg Besi-Ulu Kelang Elevated Expressway (SUKE), and Serdang-Kinrara-Putrajaya Highway (SKIP).

Hong Leong Investment Bank’s (HLIB) head of research Low Yee Huap said the aforementioned stocks could be the key beneficiaries for the highways. Nonetheless, news of the highways is not new and have been largely priced in.

“Out of the seven highway projects, six have been previously speculated in the market.Only the SKIP highway has sketchy information. As such, we believe that market has mostly priced in the above projects as part of contract wins assumption for major construction players,” he said in a note this morning.

HLIB also had hold ratings for all the beneficiaries. The research house’s target prices are: IJM Corp (RM7.09), WCT (RM2.26), TRC (57 sen) and Mudajaya (RM2.48). HLIB did not rate AZRB and Bina Puri.

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