MHB (5186) : MMHE earnings below expectations, says CIMB Research
KUALA LUMPUR: CIMB Equities Research said Malaysia Marine and Heavy Engineering’s (MMHE)net profit for the nine months ended Sept 30, 2014 (9M14) accounted only 70% of its and consensus full-year forecasts due to project delays.
It said on Thursday that more worryingly, the company's dry spell, which resulted in the order book shrinking to a record low of RM1.7bil, ran counter to the positive outlook of its peers.
“Despite a rollover, our target price falls to RM2.10 from RM3.25 as we cut FY14-16 EPS for lower contract win assumptions.
“We now value the stock at 21.2 times CY16 price-to-earnings (P/E) (formerly 23.4 times CY15 P/E) as we lower the target premium from 40% to 30% over our 16.3 times target market P/E to reflect the current weak oil price sentiment,” it said.
CIMB Research maintained its Reduce call, with the potential de-rating catalysts of slower order book momentum and extended project delays. Switch to SapuraKencana, it said.
http://www.thestar.com.my
KUALA LUMPUR: CIMB Equities Research said Malaysia Marine and Heavy Engineering’s (MMHE)net profit for the nine months ended Sept 30, 2014 (9M14) accounted only 70% of its and consensus full-year forecasts due to project delays.
It said on Thursday that more worryingly, the company's dry spell, which resulted in the order book shrinking to a record low of RM1.7bil, ran counter to the positive outlook of its peers.
“Despite a rollover, our target price falls to RM2.10 from RM3.25 as we cut FY14-16 EPS for lower contract win assumptions.
“We now value the stock at 21.2 times CY16 price-to-earnings (P/E) (formerly 23.4 times CY15 P/E) as we lower the target premium from 40% to 30% over our 16.3 times target market P/E to reflect the current weak oil price sentiment,” it said.
CIMB Research maintained its Reduce call, with the potential de-rating catalysts of slower order book momentum and extended project delays. Switch to SapuraKencana, it said.
http://www.thestar.com.my
