Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG
Research House: OSK
Company Name: MALAYSIA MARINE AND HEAVY ENG
Research House: OSK
OSK Research has upgraded Malaysia Marine and Heavy Engineering Holdings Bhd's(MMHE) financial year 2012 earnings forecast by 14 per cent.
This follows the company's announcement that it has entered into a memorandum of understanding (MoU) with Sime Darby Engineering for the acquisition of a fabrication yard in Pasir Gudang for RM399 million.
OSK Research said the acquisition enables MMHE to capitalise on the expanded yard capacity and hence, develop the flexibility to undertake a larger number of project bids, to enlarge its share of domestic and regional contracts.
"We view this acquisition positively as MMHE can now double its annual capacity to 129,700 tonnes," it said in a research note today.
The research house said the acquisition is timely as the company has strong orders but lacks sufficient yard space to perform its fabrication jobs due to an existing high utilisation rate of above 80 per cent.
Currently, MMHE possesses a RM3.1 billion orderbook and a tenderbook worth RM5 billion, a portion of which management expects to realise by the next quarter.
Following the earnings forecast upgrade, OSK has maintained a "buy" call on MMHE but upgraded the fair value of the company to RM8.23 from RM7.20 previously. --Bernama
This follows the company's announcement that it has entered into a memorandum of understanding (MoU) with Sime Darby Engineering for the acquisition of a fabrication yard in Pasir Gudang for RM399 million.
OSK Research said the acquisition enables MMHE to capitalise on the expanded yard capacity and hence, develop the flexibility to undertake a larger number of project bids, to enlarge its share of domestic and regional contracts.
"We view this acquisition positively as MMHE can now double its annual capacity to 129,700 tonnes," it said in a research note today.
The research house said the acquisition is timely as the company has strong orders but lacks sufficient yard space to perform its fabrication jobs due to an existing high utilisation rate of above 80 per cent.
Currently, MMHE possesses a RM3.1 billion orderbook and a tenderbook worth RM5 billion, a portion of which management expects to realise by the next quarter.
Following the earnings forecast upgrade, OSK has maintained a "buy" call on MMHE but upgraded the fair value of the company to RM8.23 from RM7.20 previously. --Bernama
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