MMHE  has  secured  contracts  close  to  RM350m  which  involves fabrication  and  other  associated  works  for  two  exploration  and production  projects  offshore  Peninsular  Malaysia.  The  first  contract  is for the fabrication of  well head platform, jacket and connecting bridge for the central processing platform for the North Malay Basin Bergading Complex, scheduled for delivery to Hess E&P Malaysia by 2016.

The second  contract  is  the  procurement,  construction,  hook  up  and commissioning contract for the Besar-A  well head platform and jacket as  well  as  the  associated  host  tie-in  work  for  PETRONAS  Carigali, scheduled to be completed towards the end of 2015. (Source: Company Press Release)

Comment: The RM350m Bergading and Besar-A contracts are MMHE’s only contract wins in YTD-2014 and hence, the group’s full year contract wins will likely to fall short of our projection of RM2.5bn. No changes to our  earnings  forecast  for  now,  pending  the  announcement  of  MMHE’s 3Q14  results  on  November  5th or  6th .  We  are  reviewing  our  REDUCE rating and price target of RM3.10.

Source: Affin Hwang Capital Research - 4 Nov 2014