Friday 29 Mar 2024
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Muhibbah Engineering (M) Bhd (-ve)

Muhibbah’s share price (Fundamental: 1.1/3, Valuation: 0.8/3) has rebounded strongly, gaining 41.2% to RM2.64, from a slump in 2H2014 amidst a major selldown in O&G counters.

Its share price recovery is likely due to its large order book of RM1.9 billion (as at 25 February 2015) and potential job wins from the US$27 billion Refinery and Petrochemical Integrated Development (RAPID) project. The company secured its maiden RAPID contract totalling US$32 million in early February.

To recap, Muhibbah provides engineering and construction services with a focus on O&G and marine infrastructure. It is also involved in crane fabrication (via a 60.94% stake in Favelle Favco Bhd), shipbuilding, airport concessions in Cambodia and road maintenance concessions in Malaysia.

The stock is trading at a trailing 12-month P/E of 13.4 times and 1.7 times book value. A first and final dividend of 4 sen for 2014 was proposed, giving a yield of 1.5%.

muhibbah-28apr15

This article first appeared in The Edge Financial Daily, on April 28, 2015.

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