MUHIBAH (5703) : CIMB Research maintains Add on Muhibbah, cuts target price to RM3.64
KUALA LUMPUR (Nov 18): CIMB Research has maintained its Add rating on Muhibbah Engineering Bhd at RM2.56 with a lower target price oF RM3.64 (from RM3.89) and said the award of the regas plant in Pengerang to Samsung should not be viewed as negative for Muhibbah given that it did not bid for it.
In a note Nov 17, CIMB Research analyst Sharizan Rosely also said the risk of delays in oil & gas infra projects in Rapid has been overplayed.
He said lower oil prices were negative for upstream players but net positive for downstream contractors like Muhibbah as construction costs were lower.
“Our EPS forecasts are intact but we cut our target price (still based on a 20% RNAV discount) as we update for Favelle Favco's lower market cap.
“We view today’s 11% fall in Muhibbah’s share price as a buying opportunity.
“The stock now trades at an undemanding FY15-16 P/E of 9-10x. Muhibbah remains an Add and our preferred small/mid cap pick, with job wins as a catalyst,” he said.
At 92.24am, Muhibbah shed 0.87% or two sen to RM2.38 with 3.8 million shares done.
http://www.theedgemarkets.com/en/node/170257
KUALA LUMPUR (Nov 18): CIMB Research has maintained its Add rating on Muhibbah Engineering Bhd at RM2.56 with a lower target price oF RM3.64 (from RM3.89) and said the award of the regas plant in Pengerang to Samsung should not be viewed as negative for Muhibbah given that it did not bid for it.
In a note Nov 17, CIMB Research analyst Sharizan Rosely also said the risk of delays in oil & gas infra projects in Rapid has been overplayed.
He said lower oil prices were negative for upstream players but net positive for downstream contractors like Muhibbah as construction costs were lower.
“Our EPS forecasts are intact but we cut our target price (still based on a 20% RNAV discount) as we update for Favelle Favco's lower market cap.
“We view today’s 11% fall in Muhibbah’s share price as a buying opportunity.
“The stock now trades at an undemanding FY15-16 P/E of 9-10x. Muhibbah remains an Add and our preferred small/mid cap pick, with job wins as a catalyst,” he said.
At 92.24am, Muhibbah shed 0.87% or two sen to RM2.38 with 3.8 million shares done.
http://www.theedgemarkets.com/en/node/170257
