MHB shares rise after unit bags Petronas contract
KUALA LUMPUR: Shares in Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) rose five percent to 84 sen at 10.15 am with 1.3 million shares traded, after its subsidiary, Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) and partner, Hiap Seng Engineering Ltd won a master service agreement from Petronas.
The agreement for integrated turnaround main mechanical and maintenance mechanical static from Petronas is valid for five years with an option to extend by the state oil company.
Affin Hwang Capital research today said it is positive on this news and the group’s strategy to diversify and tender for more maintenance based work, due to the slowdown in big Engineering, Procurement, Construction, Installation & Commissioning (EPCIC) contract awards.
“We understand that there are still additional packages yet to be awarded, which could benefit some of the other maintenance players like Serba Dinamik (BUY; TP: RM4.70).
“Nevertheless, assuming a 50:50 partnership in the case of MMHE, profit contribution could be small to total group profit,” it said in a note today.
Hence, Affin Hwang Capital research said it is maintaining a ‘hold’ call on MHB with a target price of 61 sen, based on book value (P/BV) ratio of 0.4 times.
