MAYBANK MAINTAINS ‘BUY’ CALL ON MHB WITH UNCHANGED TP AT RM1.00
KUALA LUMPUR, Aug 2 (Bernama) – Maybank IB Research has maintained a “buy” call on Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) with an unchanged target price (TP) of RM1.00 on the back of improved prospects as replenishment orders would be an immediate catalyst for the company.
In a research note, the research firm said despite losses registered in its first half 2018 results, which was anticipated, the company is on a firmer footing, from the cost and cash flow perspectives.
“Bids prospects are improving. Its tenders’ pipeline is on the rise, up 54 per cent quarter-on-quarter to RM4.3 billion as at end-June 2018, on improving external conditions which includes oil price, sentiment and capital expenditure,” it added.
Meanwhile, Kenanga Research in its note, downgraded MHB to an “underperform” call from “market perform” with a lower TP of 69.5 sen from 82 sen previously.
This was based on the company’s prolonged period of losses anticipated at its engineering unit, with a longer than expected turnaround, and a bulk of the RM1.1 billion order book which is over reliant on its Bokor project which yields thin margins, amongst others.
“Risks to our call include stronger-than-expected contract wins and margins,” said Kenanga Research.
At 11.49 am, MHB’s share price was seven sen lower at 72.5 sen with 2.40 million shares changing hands.
– BERNAMA