Wednesday, October 19, 2011

MMHE shares advance on Teluk gas development job

KUALA LUMPUR: Heavy Engineering Holdings Bhd (MMHE) shares advanced on Wednesday, Oct 19 after its unit landed a contract for the Teluk gas development project by ExxonMobil Exploration and Production Malaysia Inc.

At 9.15am, MMHE was up 16 sen to RM6.11 with 110,400 shares traded.

The company said on Oct 18 that the scope of work included the CONSTRUCTION [] to commissioning of
two top sides and two jackets to support the platforms.

MIDF Research in a note Oct 19 said that assuming EBIT margin of 9%-10%, it expects this new job to generate a total of approximately RM16 million-RM18 million net profit to MMHE.

The research house made no changes to its forecasts as it had already factored in this new contract win into its CY11 job replenishment assumption.

'Our Target Price is unchanged at RM6, derived from 22.5x PER12, which is about 10% above the sector average.

'Further downside is cushioned by company's net cash position of RM1.26 per share with no borrowing and potential earnings contribution from the proposed acquisition of Pasir Gudang Yard,' it said.


No comments:

Post a Comment