Results Note � MMHE (HOLD, downgrade)
Headwinds crimping earnings: downgrading
MMHE�s 2Q17
losses widened as weaker margins continued to be the main culprit for both
the heavy engineering and marine business units (MBU). 6M17 core net losses
of RM10m missed our and consensus forecasts. We cut our 2017-19E earnings by
79%/4%/11% as we lower our margin assumption for both business segments. We
cut our 12-month TP to RM0.73 (from RM1.12), pegged to our lower valuation of
0.45x 2018E P/BV. Downgrade to HOLD, from BUY.
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