KUALA LUMPUR, July 13 (Bernama) -- Kenanga Research today reiterated its ?Outperform' call on George Kent (M) Bhd (GKent) with a revised target price of RM2.20, following the continuation order for the light rail transit (LRT3) project by the government.
"We see deep value emerging in the stock, arising from the recent sell-down due to the negative news flow in construction as several mega infrastructure projects were scrapped since the change in government."
"We believe that the stock should re-rate given that they have received the green light from the government to proceed with LRT3," the research house said in a note today.
Yesterday, the Ministry of Finance gave the green light for construction works on the LRT3 project as GKent managed to lower the total cost from RM31.6 billion to RM16.6 billion after working relentlessly with GKENT-MRCB JV to come up with the cost reduction plan within a short span of time.
GKENT-MRCB JV is a joint venture company between GKent and Malaysian Resources Corporation Bhd (MRCB).
"We are positive on the news as it provides clarity to the market on the fate of LRT3 which could be shelved due to its high cost."
"However, management indicated that they are still working closely with the government on the project delivery partner structure which has yet to be finalised," it added.....