KUALA LUMPUR, June 12 (Bernama) -- Kenanga Research has maintained its 'outperform' rating on Muhibbah Engineering (M) as it believed the company could ride on both the robust oil and gas (O&G) and construction sectors outlook.
The group's proven track record as a marine, O&G and civil contractor supported the outlook, it said.
Muhibbah, through its 62 per cent-owned subsidiary Favelle Favco, had secured crane supply orders worth RM161.1 million, which are expected to be delivered to its customers in mid- to end-2014.
Including these jobs, the crane division's orderbook increased to RM806 million from RM645 million previously, it said.
"Assuming a net margin of 9.0 per cent, the new orders could add another RM9.0 million into Muhibbah's bottomline next year, translating into two sen a share for EPS (earnings per share)," said Kenanga.
The research house said Muhibbah's current orderbook was estimated at RM2.24 billion, comprising RM1.2 billion from construction, RM806 million from crane division and RM196 million from shipyard business, which would last it for the next two to three years.
"There's no change in our earnings estimate as we have already imputed RM500 million new contracts for the crane division," it added.
Kenanga has maintained its target price of RM1.63 for Muhibbah based on sum-of-parts valuation.
-- BERNAMA
The group's proven track record as a marine, O&G and civil contractor supported the outlook, it said.
Muhibbah, through its 62 per cent-owned subsidiary Favelle Favco, had secured crane supply orders worth RM161.1 million, which are expected to be delivered to its customers in mid- to end-2014.
Including these jobs, the crane division's orderbook increased to RM806 million from RM645 million previously, it said.
"Assuming a net margin of 9.0 per cent, the new orders could add another RM9.0 million into Muhibbah's bottomline next year, translating into two sen a share for EPS (earnings per share)," said Kenanga.
The research house said Muhibbah's current orderbook was estimated at RM2.24 billion, comprising RM1.2 billion from construction, RM806 million from crane division and RM196 million from shipyard business, which would last it for the next two to three years.
"There's no change in our earnings estimate as we have already imputed RM500 million new contracts for the crane division," it added.
Kenanga has maintained its target price of RM1.63 for Muhibbah based on sum-of-parts valuation.
-- BERNAMA
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