Results Note � MMHE (REDUCE, maintain)
- Weak results, challenging outlook
MMHE�s 9M14 core pretax profit fell by 40% yoy to RM90m on
weaker EBIT margins from both the offshore and marine businesses. Results are
below consensus and our expectations. The group has merely secured RM325m of
new contracts YTD, likely to miss our forecast of RM2.5bn. We cut our
2014-16E pretax profit forecast by 24-28%, and slash our TP to RM2.00 (from
RM3.10), pegging the group at a lower target PER of 18x (from 21x). Maintain
REDUCE.
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