Better prospects for MMHE over the next 24 months

Better prospects for MMHE over the next 24 months

Maybank Investment Bank says MMHE continues to show improved operational and financial strength.

Maybank Investment Bank expects more job wins for MMHE over the next two years. (MMHE pic)
KUALA LUMPUR:
Maybank Investment Bank Bhd (Maybank IB) expects Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) to deliver stronger order backlog, tender pipeline, cash and earnings over the next 24 months.

The investment bank said it remains positive about the company’s operational outlook and financial strength. MMHE is involved in shipbuilding and heavy engineering.

“Tender pipeline remains robust (RM15 billion – RM16 billion), signalling revived capital expenditure spending in the industry. Its order backlog has risen to RM2.2 billion as of end-September versus RM1.7 billion in June. MMHE has to date covered about 74% of our new order intake expectation for the financial year 2022 (FY22) (RM675 million).

“We do not rule out MMHE surpassing our job win intake forecast as we expect more job wins over the next 12 to 24 months,” it said in a research note.

Maybank IB said MMHE’s higher net cash level and positive free cash flow are key positives and reflect its improved cost and cashflow management controls.

As such, the investment bank remains positive on MMHE and has recommended a “buy” call with an unchanged target price of 85 sen.

At 10.02am, MMHE gained one sen to 44 sen with 162,900 shares traded.

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