ECM: Malaysia Marine & Heavy Engineering (3QFY11 Results): A disappointing year (Maintain SELL, TP: RM4.21)

Date: 
2012-02-22
Firm: 
ECMLIBRA
Stock: 
MHB
Price Target: 
4.21
Price Call: 
SELL
Last Price: 
0.41
Upside/Downside: 
+3.80 (926.83%)


Maintain SELL, TP: RM4.21

9MFY11net profit of RM206m (-36% y-o-y, -42% q-o-q) was disappointing making up only51% of house and 42% of consensus full year estimates. The variance from ourresults were due to (i) delays in projects delivery (ie. Gumusut-Kakapload-out), (ii) lower than expected recognition from new projects, and (iii)higher-than-expected effective tax rates. At current price, MMHE is trading ata hefty PE of 22x, a 51% premium over average comparable peers in the region.Considering MMHE's smaller net income and smaller market capitalizationagainst closest peers Sembcorp Marine and Keppel Corp, as well as slower growthin the next 2 years, we feel that its PER valuation is unjustifiably rich.Reduce target price from RM4.96 to RM4.21. Maintain our SELL.

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Discussions
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andrew LEE

Bull shit , maintain buy

2012-02-22 20:17

sheridansulik

Yup, gemusut project has been delayed for 4 years, they need to get two more projects at the same magnitude to start reaping profit...

2012-02-22 20:27

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