Usd/Myr 4.5 now~ almost cover back 2/3 of forex loss in previous quarter.

Muhibbah Engineering counts on bright prospects to see price uptrend
https://www.moomoo.com/community/feed/muhibbah-engineering-counts-on-bright-prospects-to-see-price-uptrend-113659731836934

CGS's TP @ 1.34
Strong associate earnings; awaiting new wins

3Q24 results in line, supported by Cambodia airport concession
● Muhibbah delivered a 3Q24 core net profit of RM11.4m, bringing its 9M24 core net profit
to RM36.9m. This is within expectations at 69% of our and Bloomberg consensus’ full
year net profit forecasts. We expect better earnings delivery for 4Q24F as construction
and cranes earnings pick up.
● For 3Q24, there was an unrealised forex loss of RM29.5m as the RM appreciated
against the US$. This largely impacted its cranes division in 3Q24 which has US$
receivables given its global operations.
● 9M24 revenue increased by 69% to RM1.4bn, driven by higher revenue for construction
and cranes.
● The key positive in 3Q24 was strong associate profit of RM31.6m (+122% yoy and +96%
qoq), largely from its Cambodia airport concession (Phnom Penh and Silhanoukville).
This is commendable, in our view, as the corresponding figure for 3Q23 included the
Siem Reap airport concession that was surrendered back to the Cambodia government
in Oct 23.
● 9M24 passenger arrivals for the Phnom Penh airport and Silhanoukville airport
concession rose 19% yoy to 3.5m. For 3Q24, China passengers made up 23% of total
passenger arrivals (vs. 18% in 3Q23, and 61% in FY19).
● 3Q24 pretax profit for its crane business, stripping out the effects of forex, jumped 113%
qoq, but slipped 4% yoy, to RM30m. Its construction division in 3Q24 posted a loss
before tax of RM33m due to the reversal of profit recognised from higher inflationary
pressures (vs. RM8m pretax profit in 3Q23).

Needs to clinch more wins to ensure better earnings visibility
● Muhibbah’s orderbook (construction and cranes) was RM1.4bn as at Nov 24, which is
down from its Nov 23 peak of RM2.4bn.
● It has yet to win any material contracts this year but has submitted a large tender for an
EPCC role for the Lang Lebah gas field. Given its prior experience with similar projects
in Gansar, Bekok and Bindu in Terengganu, we see it as a frontrunner for this project.
● Muhibbah’s value proposition is not in government infrastructure or the data centre
space but more in marine-based construction and offshore platforms leveraging on its
Petronas fabrication licence, in our view.
● Its crane business under Favelle Favco has also submitted a tender for the supply of
tower cranes for the world's biggest construction project known as Neom in Saudi
Arabia, with a potential award by early next year.

Reiterate Add and TP of RM1.34 based on SOP
● We like Muhibbah for its attractive valuation at FY25F P/E of 9x (vs. sector of 16x) and
for being a proxy in the recovery in tourist arrivals via Cambodian airports, while its
Petronas fabrication licence should enable it to clinch more Petronas jobs, in our view.
● Key downside risks are non-continuity in earnings delivery and higher raw material
costs.
● Re-rating catalysts include better earnings delivery and stronger tourist arrivals in
Cambodia.

24Q3 one off gain of 184m

Q4 will much better as profit should add back the unrealize forex part follow with the weaken of Ringgit

FAVCO 24Q3 result:
If exclude the one off items (eg: forex, allowances, derivatives & etc), core PBT stood as:

24Q3: 27.231m
24Q2: 14.863m
24Q1: 14.686m

23Q4: 50.988m
23Q3: 22.040m
23Q2: 7.088m
23Q1: 9.994m


Forex loss of RM 27m in Q3 due to rapid strengthening of MYR.

Good thing is bulk of this still remain unrealised loss as yet to convert back to Ringgit.

Ringgit start weaken significantly since early Q4

Without the one off items, Q3 result actually much better than Q1 or Q2!

Q4 should look much more better now; especially add back the unrealized gain in forex

FAVCO 24Q3 result:
If exclude the one off items (eg: forex, allowances, derivatives & etc), core PBT stood as:

24Q3: 27.231m
24Q2: 14.863m
24Q1: 14.686m

23Q4: 50.988m
23Q3: 22.040m
23Q2: 7.088m
23Q1: 9.994m


Forex loss of RM 27m in Q3 due to rapid strengthening of MYR.

Good thing is bulk of this still remain unrealised loss as yet to convert back to Ringgit.

Ringgit start weaken significantly since early Q4

Cambodia’s airports record 21 percent rise in passengers

https://www.khmertimeskh.com/501594562/cambodias-airports-record-21-percent-rise-in-passengers/

Phnom Penh airport recorded total 395 arrival flights this week~ the highest number since MCO !

** the 2nd highest number was recorded in first week of Oct as 381 arrival flights

Compare with:
24Q1: average 356 flights / week
24Q2: average 356 flights / week
24Q3: average 363 flights / week

Q4 number looks encouraging~

多家航空公司计划开通直飞柬埔寨航线
https://www.jianhuadaily.com/20240927/256889

The outstanding Regulated Short Selling (RSS) has reduce to 1,559,400 unit now~ compare peak at 2,935,200 during mid Sep.

The lowest since end of July crash~

Base on CGS/Cimb report, Q1 oni achieve 10% of full year consensus profit base on Tp 1.34.

Q2 now alrdy climb back 50%.

Q4 use to be strongest in history trend (in term of core profit)

High chance to exceed their full year consensus profit then. Raise TP !

Muhibah’s 24Q2 result

1. Crane segment (Favco)
- accidentally lower earning from crane business as lack of one off gain, eg forex (24Q2 -1.5m vs 24Q1 +4.1m / 23Q2 +7m)
- If take off all the one off items, the core PBT in 24Q2: 14.9m vs 24Q1: 14.7m / 23Q2: 7m

2. Concession segment (mainly from airports)
- Recorded PBT 16.9m in 24Q2 (+40.6% compare 24Q1 / +77.2% compare 23Q2)
- Surprising good as Q2 & Q3 used to be low travel season in Cambodia
- Passengers in 24Q2 recorded 1.136m (+13% compare 23Q2)
- Passengers in July continue growth with +23% y-y

3. Infrastructure Construction segment
- reported PBT 40m (compare 8.7m in 24Q1 / loss 1m in 23Q2)
- highest quarter profit since 2018


Overall fantastic result.
But concern of order-book replenish as year-to-date yet to get any award.

Kuantan Marine Hub’s groundbreaking ceremony

kena aim by short seller group (RSS)~

first RSS happened in Apr (around 8k lot) , then no more in MAY & JUN.

this week start again with :
31/7: 7810 lot
30/7: 6765 lot
29/7: 687 lot

So far the airport traffic is not impact by the IT crisis.. the daily arrival/departure flights still around the average number as website show.. except small number delay for few hours

越南航空公司计划于今年10月27日起开通河内-金边直飞航班。每周一、周三、周五和周日运营四趟往返航。New routes~
https://www.jianhuadaily.com/20240716/247428

Cambodia Airports Passengers Traffic (exclude Siem Reap Airport):

1H24: +18% Y-Y (Jan-Jun)


2023 Full year: 4.031mil passengers

2022 Full year: 2.010mil passengers 


new route: KUL to SIHANOUKVILLE
亚洲航空（ Air Asia）将于今年7月开通马来西亚吉隆坡直飞西港航班
https://www.jianhuadaily.com/20240621/243150

and Westport expansion plan..

quarter result too slow~ need more contracts to boost up the share price faster !!

first 6 months tak dapat contract~ mean next 6 months higher chance lo..

BUY~ xD

The only uncertain is the construction segment.. now depends u wanna trust the management or not le.. haha.

Any contract during this period is the bonus ! So far this year no get any right?

But management mentioned tender book now 3bil; successful rate medium to high~

Crane - should improve q-q as previous quarter used to be weakest quarter.

Airport - should similar like Q1 even though not peak travel season but mitigate with few new routes during this quarter.

Im no sure boss collect or not la. They dont sell then im happy enough.. lol

But upcoming quarter result should good~

Previously im concern on construction segment.. but after AGM, management said ongoing 6 projects also profitable. Let’s see.

Cambodia records over 2.5 mln air passengers in first 5 months: minister

But the figure include SiemReap airport~
https://www.khmertimeskh.com/501507812/cambodia-records-over-2-5-mln-air-passengers-in-first-5-months-minister/

number of passengers got to wait July report. I only have the record for number of flights departures everyday.

So far the numbers of flights for Q2 are slightly higher compare the Q1.

**The siemp reap's number alrdy taken out for calculation.

die die must link it to DATA CENTER .. xD

Tender book.
Not order book

sarawak built data center kah ? ahha~

rubber price hit new high since 2021.
with the current high inventory, should look positive.

Im more interesting with the ship building/repair segment.. but Petronas Safina phase 2 seem like will only begin in Q3.

Refer SYGROUP report, their ship building/repairing business alrdy show much improvement for past 3 quarter:

1.8m >> 3.5m >> 9.6m profit

Below the figure i want..lol..
but it is highest profit since MCO.

Very hard for me to interpret the result, especially the non controlling interest part.. quite confuse. But construction segment seem like no drag the overall result this round.

Let’s put hope for the Q2:

Concession - contribution should remain similar like Q1; not travel season but mitigate by resume some routes

Construction + Crane : should record higher contribution than Q1 (cny+puasa)

Favco result yesterday was so so only.. but it is ok.. it used to be weak in Q1.

Airport business used to peak in Q1 during travel season. Hopefully can show power this time.

But most important is the construction segment~ jgn drag the group again.

Any reversal impairment + shipping segment might be bonus for Muhibah

Airport passengers in Apr +12% compare last year. Actual figure will only announce by quarter (next in July).

It is Hard to calculate the monthly figure now after exclude SiemReap airport.

sales to U.S might increase~ but other regions sales might takeover by China gloves.

lanpa vs palan.. apa different ?

bear in mind~ the tariff is imposed by U.S only. and they used to get special waiver case by case

anak dah new high in 2 years~ kasi tumpang power break above 1

6月起金边暹粒-郑州航线航班将增至每周3班

（金边讯）中国河南省副省长孙守刚表示，自6月起，金边暹粒—郑州国际客运航线航班将增加至每周三个航班。


https://cc-times.com/posts/24690

迪拜—金边即将恢复往返航班

【本报消息】阿联酋航空公司（Emirates Airline）将于5月1日起，正式恢复暂停约3年的迪拜-金边客运往返航班。



据介绍，该航空公司将于今年5月1日起恢复从迪拜经新加坡中转至金边的客运航班，届时每日一班。

应提的是，阿联酋航空于2017年开通迪拜往返金边航班。然而，受新冠疫情影响，该航班自2021年以来停航至今。



https://www.jianhuadaily.com/20240424/236612

This week PP airport recorded highest number of arrival flights as 375 (highest since MCO)
Prior to this the highest was 367 flights (last week & twice in Feb).

24Q1 average as 356 flights/week.

23Q4 average as 341 flights/week.

Cambodia Airports Passengers Traffic (exclude Siem Reap Airport):


2024 Q1: 1.181mil passengers
Y-Y increase 22.9%
Q-Q increase 8.6%



2023 Full year: 4.031mil passengers


2022 Full year: 2.010mil passengers 


Wow~ the CIMB research is good ! He quoted below statement in the Feb report:

‘The most ideal scenario for Muhibbah is to receive compensation for the loss of its existing operations of Phnom Penh airport and be engaged to operate the new airport’



Today it’s come TRUE !!!

柬埔寨政府授权法国机场特许公司 参与经营新金边国际机场
https://cc-times.com/posts/24528

Muhibah + Teo Chang Hock have more than 10% shareholding in MASTER-PACK.

Should press the management to increase the dividend pay out !

**Muhibah & Teo are the shareholder in FAVCO as well~

Let’s see which catalyst above will come first~


ValueMaker
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
2 days ago

Pay dividend to shareholder > shareholder get dividend buy ksl house > money back to KSL.

Win win !

One off impairment loss 10m + forex loss 3m..

If Exclude these, revenue & core profit are roughly flat compare Q-Q / Y-Y.

Cimb increase Tp from 0.90 to 1.34 today !!!

Muhibah latest result,
PBT Q4: 8.6m
PBT Full year: 66.9m

If exclude the one off general provision claim of 40m,
PBT Q4: 48.6m (almost close to 2019 result)
PBT Full year: 106.9m

If exclude ALL the one off items like impairment, provision, forex, write off etc,
PBT Q4: 74.7m
PBT Full year: 127.6m

FAVCO result :

Q4 PAT: 21.3m
Full year PAT: 61.2m

Adjusted core earning (exclude one off item)
Q4: 41m
Full year: 66m

Net profit 21mil include impairment.

If exclude all the one off items, core net profit should be 41m !!!