Posted by ValueMaker > 4 weeks ago | Report Abuse

Part 1: Introduction of Muhibah’s Business


1. Crane division
- owns 64% of total shareholding in Favelle Favco Berhad (stock code: 7229)
- the cranes mainly use for tower building, oil and gas sector, wind farm installation, port handling & etc
- Favco’s crane was used to construct the world tallest buildings, include:
i) Burj Khalifa, Dubai
ii) Merdeka 118, KL
iii) One Word Trade Center, NewYork
iv) Taipei 101, Taipei
v) Shanghai World Financial Center, Shanghai
vi) Tun Razak Exchange, KL
vii) International Commerce Centre, Hongkong
viii) Petronas Twin Towers, KL


2. Infrastructure Construction division
- mainly involve o&g projects, port, highway, railway, airport, bridge and etc
- completed project include:
i) installation of noise barriers for MRT, LRT, SUKE & etc
ii) wharf & terminals at Westport, Klang & Jurong, Singapore
iii) various of Petronas’s projects (onshore & offshore)
iv) large cargo building at Kuala Lumpur International Airport
v) hydroelectric project at Sarawak
vi) Ministry of Transport’s headquarter at Putrajaya
vii) Royal Malaysia Naval Base project
viii) Penang Bridge upgrading project


3. Marine Ship Repairing / Ship Building division
- owns the second largest offshore fabrication yard in Malaysia
- built and delivered more than 70 vessels both locally & overseas
- include Offshore Supply Vessels, Anchor Handling Tug/ Supply Vessels and Offshore Well Support Vessels with DP2 capabilities


4. Airport Concession
- owns 21% effective stake in Cambodia Airports
- manages the 2 operating international airports: Phnom Penh (capital city) and Sihanoukville


5. Road Maintenance Concession
- owns 21% stake in Roadcare (M) Sdn Bhd
- awarded concession to maintain Federal Roads in central and eastern Peninsular Malaysia (Selangor, Pahang, Terengganu & Kelantan)


6. Other
- second largest shareholder (7.96%) in Master-Pack Group Bhd (stock code: 7029)




** Strong outstanding Order-Book of RM 2.20b
- growth from RM 1.58b (2022) / RM 0.83b (2021) / RM 0.97b (2020) / RM 1.5b (2019) / RM 1.7b (2018)

** Nature of it business, good proxy for recovery in Tourist, Infrastructure, Marine and O&G sector

Posted by ValueMaker > 4 weeks ago | Report Abuse

Part 2: Catalyst / Upcoming events:

1. MRT 3 / Penang LRT
- high chance for Noise Barrier job as it was the winner for past rails/highway projects
- other related parts/works award might be bonus

2. Strong OIL price may support continuous Capex spending
- more than RM 990m jobs awarded directly from Petronas between 2022 & 2023
- Petronas’s RM 25b/year capex to spend locally

3. Recovery of Cambodia tourist
- flights passengers jump > 100% in 2023 compare 2022
- concession profit improved significantly to RM 60m (compare to RM1m loss in 2022)

4. Compensation from Cambodia as early termination of airport concession
- new airport to replace the existing Phnom Penh airport by 2025/26
- unlike the SiemReap airport (non-exclusive rights), Phnom Penh airport which has an exclusive clause in the concession agreement should receive fair compensation
- based on the RHB research in March 2020, the estimate compensation should between RM 747m - 874m (actual value should be lesses now as tenure shorten)

5. Petronas Safina Project (marine)
- aims to build up to 100 vessels over the next 4-5 years to replace the old vessels
- Muhibah is one of the very few local shipyards shortlisted by Petronas
- back to last peak cycle during 2010-2014, Muhibah’s marine division recored continuous > Rm 40m profit / year

6. Westport expansion plan RM 39.6b
- expertise in wharf & port related job
- existing client relationship

7. Saudi Line City project
- a linear smart city which is designed to have no cars, streets or carbon emissions
- CIMB research in Feb 2024 first disclosed that Muhibbah alluded to possible tenders

Posted by ValueMaker > 3 weeks ago | Report Abuse

KUALA LUMPUR: Rakuten Trade Sdn Bhd has boosted Muhibbah Engineering (M) Sdn Bhd's earnings per share (EPS) for fiscal years 2024 and 2025 (FY24/FY25), marking increases of 41 per cent and 43 per cent respectively.

This surge follows Muhibbah Engineering's remarkable performance, surpassing its expected net profit for fiscal year 2023 (FY23) by an impressive margin of 141 per cent.

"In the fourth quarter of FY23 (4QFY23), Muhibbah achieved a core net profit of RM45 million, contributing to a full-year core net profit of RM53 million, inclusive of its associate's contributions.

"This performance was attributed to improved divisions such as Marine Shipyard, Cranes, and Intelligent Automation, along with a better-than-expected recovery in Cambodian tourist traffic," it said in a note today.

The firm expects Muhibbah to secure more contracts due to Petronas' heightened capital expenditure and transportation infrastructure projects like the Penang LRT, which require noise barrier systems.

"This enhances Muhibbah's earnings predictability as it enters a phase of increased profitability," it added.

Additionally, Rakuten Trade said the engineering company stands to gain from the rapid earnings rebound of its associates through its airports in Cambodia as tourist traffic steadily recovers.

"In the 4QFY23, Cambodia's airport passenger levels reached 40 per cent of the pre-pandemic levels in the same period of fiscal year 2019 (FY19).

"We anticipate further recovery in passenger traffic, especially with the expected increase in Chinese tourists.

"It is worth noting that in FY23, passenger numbers from China only accounted for approximately 41 per cent of the levels seen in FY19.

The firm continued that it has been suggested that Cambodian airports have raised passenger service and aeronautical charges by at least 20 per cent since October 2023.

"This increase partly offsets the loss of revenue and profit contribution from Siam Reap airport after the compensation exercise.

Consequently, it said the combination of these positive factors is expected to drive earnings from its associates to unprecedented levels in FY24 and beyond.

Rakuten Trade has suggested a 'buy' rating for the engineering company, setting a raised target price of RM1.14.