Despite Record Loss Of RM27.5 Million, The Company Accepts 'Buy' Recommendation - Kakiforex | Forex markets for the smart money. Despite Record Loss Of RM27.5 Million, The Company Accepts 'Buy' Recommendation Despite Record Loss Of RM27.5 Million, The Company Accepts 'Buy' Recommendation

March 31, 2021

Despite Record Loss Of RM27.5 Million, The Company Accepts 'Buy' Recommendation

 MIDF Research increased Muhibbah Engineering Bhd's recommendation to 'buy' at RM1.10 with a higher target price (TP) of RM1.22 after informing the company recorded a loss of RM27.5 million in the fourth quarter of financial year 2020 compared to a net loss of RM69 .4 million in the same period last year.


In a note today, the research firm said cumulatively, Muhibbah's financial year 2020 (FY20) revenue remained at a loss of RM81.5 million but below analysts' expectations.


The firm added, the smoothness of construction work and the increase in passengers at its airport concessions increased gradually which in turn contributed to the revenue recovery.



"A healthy order book at a price of around RM967.0 million can provide clear revenue in the next 2-3 years," said MIDF Research.


It is clear that the firm, Cambodia Airport, which is owned by Muhibbah by 21% and accounts for up to 70% of the company's revenue, is on a gradual recovery path over the next 2 years following vaccination programs conducted around the world, especially China, America. Company (US), Southeast Asia and other countries.


“We updated the revenue estimates for FY21 and FY22 to RM47.8 million and RM68.6 million.


"This is based on our expectations of high revenue from its airport concession business and the recovery of its construction segment driven by the smooth running of the Covid-19 vaccination program in key countries such as China, the US, Cambodia and Southeast Asia," the firm said.