Wednesday, February 27, 2019

Whats Up With AZRB

AZRB is going through the perfect storm. The thing is, the so-called storm is more like the aligning of the planets for AZRB. The storm is so perfect AZRB is walking on water.

As with many counters, AZRB is expected to announce its quarterly over the next day or two. If you match it up with Naim (which delivered great results). It came all the way up from 80 sen a few days back to hit 97-98 sen today (up 8 sen for the day). Both are highly comparable.

The government has been putting out soundbites that were so much more conciliatory over High Speed Rail and ECRL. More so on ECRL I think. Even IWCity had a massive volume and jacked up day when the soundbite was pleasing for HSR but died down after a day or two.

Looking at the way both projects are going to be framed. The HSR and ECRL will not be a highly lucrative project for the winners and sub contractors.

AZRB buta-buta has the most to benefit from the ECRL owing to the land and current projects it has.

Go check their annual report. It has:
- nice tracts of land in Setapak, which is about 20km from the all important Gombak station for ECRL
- also nice tracts in Bentong
- the stations of Chukai and Kemasik are very close to Kemaman, and one of the main reason why ECRL is needed is to support and enhance RAPID refinery near Kemaman (the marine base contract by Petronas has been awarded to AZRB for another 5 years / Tok Bali supply base)
- AZRB has 4.5 acres of freehold land in Kemasik
- an even bigger plot of 66 acres in Marang which the ECRL will pass through

Looking at the price movements, AZRB is just discounting the good upcoming results and has not really priced in the ECRL potential. Be careful though, it is still potential, not written in stone.

Besides the upcoming results, Tun Mahathir will be going to China in April, possibly to lock up the ECRL on better terms.

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