As at 11.30am, the counter was the fourth-most actively traded stock with about 48.12 million shares changing hands.
Its share price has increased 1.5 sen or 4% to 39 sen, giving the group a market capitalisation of RM1.74 billion.
Yesterday, transport minister Loke Siew Fook said the Cabinet has approved in principle MRCB’s plan to rebuild KL Sentral.
The RM1 billion redevelopment will be done on a private finance initiative (PFI) basis with MRCB, the project’s developer.
Meanwhile, Hong Leong Investment Bank Bhd (HLIB) said in a note today that this flagship project boasts a total gross development value (GDV) of RM18 billion.
With a designed daily capacity of 100,000, KL Sentral has been due for upgrades for some time as currently more than 200,000 commuters pass through the station daily, said HLIB.
“We believe that with five acres left from an original 60 acres of development land, this is a timely opportunity to expand MRCB’s commercial exposure in a prime and strategic location,” it added.
MRCB is actively engaged in several other transit-oriented developments (TODs), including PJ Sentral, Penang Sentral, Kwasa Sentral, and Cyberjaya City Centre.
HLIB said that given the project will be done on a PFI basis, MRCB’s monetisation timeline will be relatively extended.
The revenue generation will occur gradually, primarily through the development and sale of residential and commercial units, and will take place once the station’s redevelopment is complete.
“From what we gather, demand has been strong historically, with residential developments seeing take-up rates of 85% and above,” it said.
Back-of-the-envelope calculations suggest that this project could increase MRCB’s net gearing from 0.27x to 0.49x, which is still considered a manageable level, HLIB added.
“Nevertheless, if MRCB undertakes this project concurrently with the Shah Alam Stadium redevelopment (costing over RM1 billion), this could take its net gearing beyond 0.49x, by our estimates,” it said.
HLIB has maintained a “hold” call on MCRB with a target price of 34 sen.