MORNING CALL: 9/11/23

TA Securities says it remains cautiously optimistic about TRC Synergy's outlook following a recent meet-up

Transcript

00:00 Today we're taking a look at TRC Synergy.

00:04 TA Security says it remains cautiously optimistic about the group's outlook.

00:08 Following a recent meetup, the stock remains a buy in its book with an unchanged target

00:14 price of 43 cent.

00:15 TRC lost trader at 36.5 cent.

00:19 So according to TA, TRC is backed by an outstanding construction order book of around RM400 million,

00:26 translating to about 0.7 times FY22 construction revenue.

00:30 The depletion of the outstanding order book was due primarily to a lack of new big contract

00:36 wins over the past two years as the group was not aggressively bidding for jobs.

00:41 Now that the prices of construction materials are more manageable, plus the easing of labour

00:46 shortage issues, TA says the group has become more aggressive in job tendering.

00:51 Currently, the group has a tender book of around RM5 billion and is still looking to

00:56 strike a jackpot worth RM3.1 billion from the MRT3 project.

01:01 It will proceed with Phase 2 of the ARA Central project, which it is targeting to launch in

01:06 the first quarter of 2025.

01:09 Down under, the property business is relatively slow amid a rising interest rate environment,

01:14 while the hotel business has yet to see a strong pickup.

01:17 So what's the consensus?

01:19 According to Bloomberg Data, TA aside, the only other research house covering TRC is

01:24 Hong Leong Investment Bank Research, with a hold rating and target price of 38 cen.

01:29 That brings the average target price to 41 cen, which is 12% higher than the stock's

01:34 last close of 36.5 cen.

01:37 [Music]