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Maybank IB sees better prospects for MMHE over nect 24 months

Maybank IB sees better prospects for MMHE over nect 24 months

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 as it continues to show improved operational and financial strength.”

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 2022 versus RM1.7 billion in June 2022.

“MMHE has to date covered about 74 per cent 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 10.02 am, MMHE gained one sen to 44 sen with 162,900 shares traded. – Bernama