MUHIBAH (5703) : CIMB Research says accumulate Muhibbah shares
KUALA LUMPUR: CIMB Equities Research has advised investors to accumulate Muhibbah Engineering shares following the latest corporate news that it has won a RM135mil job from Westports to expand Terminal 8 wharf and related works.
The research house said on Thursday this represents package A, with an option by Westports to evaluate and award package B, valued at RM256mil, within six months.
CIMB Research said the Westports contract was the group’s second port job this year, bringing the total infrastructure jobs secured YTD to RM513mil, close to its full-year expectation of RM600mil.
“We leave our EPS forecasts unchanged but estimate that package A will contribute RM12m per annum, based on a 9% pretax margin assumption,” said the research house.
It advised investors to accumulate as the stock remains oversold.
"The clarification by Petronas that projects that have received final investment decision (FID) will be spared from potential capex reductions is good news for Muhibbah," it said.
CIMB Research said Muhibbah is targeting about RM1bil worth of jobs in Rapid and has a fairly good chance of securing the RM1bil offshore jetty project in a separate area for the Pengerang regasification plant, which the research house has not imputed into our its job assumption.
“Prospects could surprise on the upside if Muhibbah succeeds in landing higher-value oil & gas infra packages beyond Rapid.
“The job flow outlook remains supported by other domestic jobs, which could include other port/marine works and new highways, particularly the West Coast Expressway (WCE). Muhibbah will also pursue MRT 2 packages, which are likely to be worth between RM700mil and RM1bil each,” said CIMB Research.
http://www.thestar.com.my
KUALA LUMPUR: CIMB Equities Research has advised investors to accumulate Muhibbah Engineering shares following the latest corporate news that it has won a RM135mil job from Westports to expand Terminal 8 wharf and related works.
The research house said on Thursday this represents package A, with an option by Westports to evaluate and award package B, valued at RM256mil, within six months.
CIMB Research said the Westports contract was the group’s second port job this year, bringing the total infrastructure jobs secured YTD to RM513mil, close to its full-year expectation of RM600mil.
“We leave our EPS forecasts unchanged but estimate that package A will contribute RM12m per annum, based on a 9% pretax margin assumption,” said the research house.
It advised investors to accumulate as the stock remains oversold.
"The clarification by Petronas that projects that have received final investment decision (FID) will be spared from potential capex reductions is good news for Muhibbah," it said.
CIMB Research said Muhibbah is targeting about RM1bil worth of jobs in Rapid and has a fairly good chance of securing the RM1bil offshore jetty project in a separate area for the Pengerang regasification plant, which the research house has not imputed into our its job assumption.
“Prospects could surprise on the upside if Muhibbah succeeds in landing higher-value oil & gas infra packages beyond Rapid.
“The job flow outlook remains supported by other domestic jobs, which could include other port/marine works and new highways, particularly the West Coast Expressway (WCE). Muhibbah will also pursue MRT 2 packages, which are likely to be worth between RM700mil and RM1bil each,” said CIMB Research.
http://www.thestar.com.my
