Wednesday, August 10, 2011

CIMB Research maintains trading Buy on Muhibbah

KUALA LUMPUR: CIMB Equities Research is maintaining its earnings per share (EPS) forecast, trading buy stance and RM1.83 target price for Muhibbah Engineering Bhd.

It said on Wednesday, Aug 10 the target price was pegged to an unchanged 40% realised net asset value (RNQAV) discount.

'Our checks with Muhibbah confirmed yesterday's news on the lifting of Asian Petroleum Hub's (APH) receivership status. This was a positive surprise to us and a huge relief to its contractor, Muhibbah as it increases the odds of recovery of the RM371 million owed by APH and suggests that there may be a resolution soon.

'This news comes at an opportune time as Muhibbah is a bottom-fishing candidate since it is trading below our worst-case value of RM1.28. We should see some clawing back of its share price which has been a casualty not just of the global stockmarket rout but also the APH problems,' it said.

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