MMHE – Another Weak Quarter                                                    Underperform

Results / Briefing Note

• MMHE’s 1HFY12 net profit of RM133.6m (-35.7% yoy) was below expectations as it accounted for only 38% our and consensus full-year estimates.
• MMHE’s offshore segment, generated revenues of RM893.2m in 2QFY12. This brought 1HFY12 revenues to RM1.5bn, accounting for only 42% of our FY12 estimates for the division.
• MMHE’s current order backlog stands at RM2.8bn, the biggest of which are the Kebabangan, Tapis EOR and FPSO Cendor projects, while it is bidding for RM5bn worth of contracts.
• Post-earnings revision, our new fair value is reduced to RM3.40 (from RM3.56) based on unchanged target PER of 15x FY13 EPS. We reiterate our Underperform call on the stock.

Source: RHB Research - 3 August 2012