KUALA LUMPUR: CIMB Equities Research said Muhibbah Engineering Bhd’s prospects straddle both the CONSTRUCTION [] and oil & gas sectors, backed by execution of the ETP.
It said on Friday, July 22 the group is a strong contender for large-scale jobs such as MRT and highways while its expertise in marine/port infrastructure gives it an added advantage in the oil & gas space.
“But uncertainty over the APH receivership issue continues to overhang the stock. Although it may be resolved satisfactorily, it is likely to dent sentiment in the medium term.
“We, therefore, raise our RNAV discount from 10% to 40%, which is broadly in line with the discount applied to our small- to mid-cap stocks. This cuts our target price from RM2.75 to RM1.83,” it said.
CIMB Research maintained its EPS forecasts and TRADING BUY call. Potential re-rating catalysts include (i) project wins, and (ii) resolution to APH.
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