Monday, February 21, 2022

PUNCAK to be lifted with speculation on MRT3 and high palm oil prices

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One of the coming excitement for the construction player in 2022 will be tender of MRT 3 related projects. With estimation as high as RM 40 billion for the whole project, investor can expect a mixture of old players in the previous MRT 1 and 2 with a slew of potential new players into the segment.

Here, I will highlight the potential new player that could come into the tender of MRT 3 - Puncak Niaga Holdings Berhad (Puncak - 6807)

With the disposal of water asset to Air Selangor for RM 1.5 billion in 2016, the company had hunt for new asset with the cash load.

The 2 significant new portfolio added into Puncak is as below

1. Purchase of TRIPLC construction firm for RM 210 million in 2016 to boost the firm construction capabilities.


2. Purchase of Shin Yang's oil palm unit in Sarawak for RM 446 million.


Now looking back at the move to purchase these asset back then, it had proven to be a good and strategic move from PUNCAK to acquire such in order to penetrate into new market.


With expectation that MRT 3 tender for civil works to be out at Q2 2022, could we be seeing PUNCAK as one of the new player in the basket as they leverage their construction prowess through the acquisition of TRIPLC back in 2016.

Beside that, it should be noticeable that PUNCAK 90% owned plantation unit is also able to enjoy a higher return from ALL TIME HIGH FCPO prices.



With so much positive news for PUNCAK in 2022, it would give a positive momentum for the company share to move upwards. 

As the company share price had hit the long term resistant, can PUNCAK successfully break above the resistant line and give an upward rally?


The next few days will determine for PUNCAK chart trending. With hopeful news on MRT 3 and all time high palm oil prices, this will bring towards an upwards rally for PUNCAK, which is trading way below is NTA of RM 2.92


IMPORTANT NOTICE

Please be informed that I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.

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