MMHE  has  appointed  Tuan  Haji  Abu  Fitri  to  succeed  the  incumbent, Dominique de Soras, as the MD & CEO of MMHE with effect from 1 March 2015. Dominique de Soras has served MMHE as MD & CEO since Feb11 and  his  contract  of  employment  will  end  on  28  Feb  2015.  Abdul  Fitri,  a Malaysian  aged  49  years  old,  is  presently  the  Vice  President,  Offshore Business  in  MISC  Berhad.  Prior  to  his  appointment  in  MISC  Berhad  in Mar13,  he  was  the  Senior  General  Manager,  Petroleum  Operations Management in PETRONAS.

Comment: We are neutral on the changes. We opine that the transition will not materially disrupt the group’s business operation, as Abdul Fitri has the relevant  management  experience  and  Dominique’s  departure  is  not unexpected. No change to our SELL rating and TP of RM1.15 based on 12x 2015E PER. We remain cautious on the group’s earnings outlook in view of lower Petronas capex and stiff competitions from both foreign big yards and domestic small players.

Source: Affin Hwang Capital Research - 14 Jan 2015