KUALA LUMPUR (Feb 20): Malaysia Marine and Heavy Engineering Holdings Bhd (KL:MHB) will stay in the black, thanks to a strong pipeline of projects, analysts said following a turnaround at the oil and gas services firm.

While net profit for the year ended Dec 31, 2024 (FY2024) only accounted for 82% of the consensus estimate, jobs on hand totalling over RM5 billion will continue to keep the company busy, RHB Investment Bank said, maintaining its ‘buy’ call on MHB in a note.

“We remain positive on the group due to its turnaround and strong order book, which underscores a favourable sector outlook,” the research house said. “We believe its robust project pipeline, coupled with improved contract terms, will support sustained profitability.”

The consensus now calls for net income of RM94 million for FY2025. A majority of five research houses kept their ‘buy’ calls on the stock, following the results announcement on Wednesday. Only CIMB Securities has a ‘hold’ call.

The average target price is now 71 sen, according to Bloomberg, suggesting a potential return of as much as 97% from the last price within the next 12 months. The stock has barely moved since the start of 2025.

TA Securities sees the company’s order book providing visibility until 2028, noting additional earnings opportunities, as the company continues to bid for heavy engineering jobs.

“Investments by oil majors in upstream activities are expected to support the marine segment’s prospects, particularly in conversion projects,” the house said.

The segment is also expanding its customer base for liquefied natural gas carriers amid growing market demand, though competitive pressures would persist due to the emergence of new repair yards in neighbouring countries and China, TA Securities flagged.

For MIDF Amanah Investment Bank, the company’s offshore wind projects are also expected to contribute to revenue, and help to keep its green revenue at 37% to 38% of total revenue going forward.

The house said it is optimistic about MHB, given its stable upstream activities, rising demand for energy transition projects, and broader focus on decarbonisation efforts, which justify the house's ‘buy’ call on the stock.

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