MUDAJAYA CORPORATION BERHAD

(Post date : 25 August 2010)

Mudajaya Corporation Berhad provides civil engineering and building construction services. Its services include road and pavement, bridge, water retaining structure, piling, underwater, airport, and water pipe line construction, as well as sewerage and general civil engineering works. Mudajaya Corporation Berhad was formerly known as Mudajaya Construction Sdn Bhd. The company was incorporated in 1965 and is based in Pataling Jaya, Malaysia. Mudajaya Corporation Berhad operates as a subsidiary of Mudajaya Group Bhd.

In March 2009, stock price is at low price RM1.25 but achieve the highest point during July 2010 at about RM6.12. The stock has gained lots during since last year, until recently July 2010, when the rumours about Securities Commission (SC) investigation in the company. What going on since the news? It doesn’t matter how serious the problem, the rumours or news have sent the investors to sell off the stock heavily.
Since July 2010, the stock price has dropped so much and reach just below 38.2% retracement at about RM4.16. It all happened in just one month. The stock almost touch the 50% retracement  on 5th  August 2010, where it were subjected to heavy selling pressure, dropped for RM1 on that particular day. The stock price rebound back on the same day after nearly touch the 50% retracement (RM3.685), the lowest price for that day is about RM3.75 but at last closed at RM3.92.
Since then, the stock price almost in the sideway trend, after a minor uptrend during the next few days after 5th August 2010. It is possible for the stock to drop to the 50% retracement (Rm3.685) in near term as it almost touch this point recenlty, and there is not much positive signs up to now. RM3.685 is a strong support line as well, as you can see from the chart, there were two previous resistance points that changed to current support line. So if this strong line is break, it will be falling further or rebound back? How much more to drop? Do not be the last person to sell off this stock!! If you still hold this stock now, you have already been too late. Hard to blame yourselves, as the research centre said it will go up to RM7 plus before the news came out. So what happen now? They are always TOO POSITIVE for the stock performance so that more investors will keep on buying. Are you one of them?

An article on Star Business
Monday September 27, 2004
Change in corporate focus for Mudajaya after MBO
By Angie Ng

SINCE a management buyout (MBO) in July 2002 that saw the transfer of the majority ownership of Mudajaya Group Bhd to the management team, Mudajaya is seeing the realisation of some of its strategic plans that will spearhead a change in the group’s corporate focus to make a bigger thrust into property development.

It was formerly a subsidiary of Mulpha International Bhd before its managing director Ng Ying Loong and other senior management team undertook the MBO at a cost of RM113.6mil.

Mudajaya was listed on the main board of Bursa Malaysia in May.

The group, which has made a bigger foray in the property sector with the launch of various new phases in its Batu Kawah New Township in Sarawak, has also set sight on moving up the property industry ranks by venturing into the high-end residential sector.

“With a bigger exposure in the property sector, this will ensure steady income streams and a cushion against the cyclical nature of the construction industry,” Ng said.

In the next one to two years, contribution from the property division to group earnings was expected to double from the current 10%.

Currently, construction made up about 80% to 85% of the group earnings while the manufacturing and trading of construction-related materials contributed about 5% to 10%.

“Our target is to maintain a contribution of between 25% and 30% from the property division to create a healthier balance for cash flow,” he said.

Mudajaya, a Class A contractor, has a portfolio of more than RM3bil worth of construction contracts in Malaysia and India.

The projects included highways, roads, bridges, power stations, buildings, infrastructures, marine structures, dams and restraining structures.

It has a gross order book of more than RM900mil over the next two years, including RM276mil worth of contracts in India.

Analysts who track the stock are optimistic of Mudajaya’s earnings potential going forward and expect annual earnings growth of 10% to 15%.

Mudajaya is in good financial footing and is in a net cash position with total cash balance of RM25mil and zero borrowing.

“The group registered a four-year revenue and net profit compounded annual growth rate of 20.6% and 51.9% respectively and has remained profitable over the past 20 years.

“Its venture into property development in a bigger way augurs well for its performance after the Government’s recent cut back on infrastructure spending,” an analyst with a foreign brokerage said.

With a price to earnings ratio of less than seven times, he said Mudajaya offered good upside potential to investors.

Tuesday July 27, 2010
Mudajaya shares fall for a second day on SC probe report
By IZWAN IDRIS

PETALING JAYA: Shares of power plant builder Mudajaya Group Bhd fell for a second day as jittery investors booked in profits from recent sharp gains on a news report that the company had been probed by the Securities Commission (SC).
Mudajaya told the exchange yesterday it “has not been directly queried by the SC” but assured investors that “it is more than willing to extend its full cooperation” if queried by the regulator.
“The board of Mudajaya is not aware of the nature of the complaint about the company by anyone whosoever,” it said in reply to the exchange’s query on the report published over the weekend.
The stock fell as much as 5.3% yesterday after trade resumed following a one-hour suspension from the opening bell to make way for the announcement.
Mudajaya shed 19 sen, or 3.2%, to close at RM5.69 on volume of 2.78 million shares.
The stock hit a record high of RM5.94 on Thursday, driven partly by speculation that a big independent power producer might buy a significant stake in the company.
Tanjong Plc, which was linked as a potential buyer, had said it had no interest in buying a stake in Mudajaya.
StarBiz made several calls yesterday to Mudajaya’s office in an attempt to get some clarification on the SC probe, but failed to speak to any of the company’s top officials.
A spokesman at the SC yesterday confirmed that the regulator was “looking into the affairs” of Mudajaya following a specific complaint made against the company but declined to elaborate.
It is believed that Mudajaya’s management had met analysts yesterday in a bid to allay some of the concerns raised about the company.
An analyst told StarBiz that the management was unaware of the nature of SC’s probe.
But despite the lack of clear details, he remained positive about Mudajaya’s future prospects because of its strong earnings growth potential and steady recurring income.

Mudajaya shares fall more than RM1

By Francis Fernandez
Mudajaya Group Bhd's shares fell by more than RM1 yesterday as investors were spooked by a poison pen email sent to sectorial analysts and investors over the last few days.

Analysts covering the stock said the hordes of selling pressure wiped out some RM415 million of its market capitalisation yesterday.

Mudajaya's shares fell by as much as RM1.18 a share yesterday, but recovered somewhat to end the day down by RM1.01 to close at RM3.92.

The fall was partly cushioned by Mudajaya buying its owns shares in the market yesterday.

Mudajaya informed the stock exchange late yesterday that it spent RM4.38 million to buy some one million odd shares at between RM4.55 and RM3.80 per share.

In total, some 11.66 million shares traded hands yesterday.

Analysts said that there was random forwarding of the poison pen emails, and hinted that there was nothing new to the emails than what was widely reported in the media earlier.

They added that the forwarding of the emails and uncertainty over the outcome of the Securities Commission (SC) probe created fertile ground for the rumours to take a life of its own.

"The company has to come out and assuage investor concerns as poison pen emails are flying around everywhere," said an analyst who covers the stock on a regular basis.

This week, two major research houses had come out with reports on Mudajaya.

CIMB had a "buy" recommendation with a target price of RM7.94 while OSK Securities also rated it a "buy" with a target price of RM7.33.

Both the analysts who wrote the most recent reports on Mudajaya declined to comment.

Late last month, Business Times reported that the SC was "looking into the affairs" of the builder.

Recent reports suggested that the probe was centred on a complaint over Mudajaya's power plant operations in India, and its ability to book higher margins than even some of its bigger peers.