Hot Stock Muhibbah rises 4.7% on TP upgrade, potential job wins

by **Cals** Wed 09 Jul 2014, 08:51

Hot Stock Muhibbah rises 4.7% on TP upgrade, potential job wins

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Tuesday, 08 July 2014 14:56

KUALA LUMPUR (July 8): Muhibbah Engineering (M) Bhd rose as much as 4.7% after CIMB Investment Bank Bhd upgraded its target price (TP) for shares of the company.

CIMB said Muhibbah's targeted contract wins from Petronas' Refinery and Petrochemical Integrated Development (Rapid) project remained intact.

At 2.32pm, Muhibbah was traded at RM3.32, up 12 sen or 3.8% with some 1.2 million shares done.

Earlier, the stock, which gained as much as 15 sen or 4.7% to RM3.35, was among top gainers on the exchange.

In a note today, CIMB maintained its “add” rating on Muhibbah with a higher TP of RM3.66. This compares with RM3.48 previously.

CIMB said its checks with Muhibbah's management revealed that the latter's RM2 billion to RM3 billion worth of bids at Rapid, and the targeted 20% to 30% success rate remained intact.

CIMB expects Muhibbah to land one to two smaller/medium-sized packages before year-end as most awards are due in the second half.

According to CIMB, Muhibbah's positive outlook, reflected in the 34% surge in its share price, did not impute its rising tender book for cranes and steel fabrication.

Muhibbah undertakes its crane building operations under Favelle Favco Bhd.

“Oil and gas jobs form 60% of current outstanding orderbook of RM1.9 billion.

“We maintain our EPS forecasts but raise the RNAV-based target price as we impute Favelle Favco Bhd market cap. Muhibbah offers the largest oil and gas infra exposure under our coverage," CIMB said.