The company, which specialises in marine engineering and construction, has seen its share price underperforming its peers in the construction and oil and gas sectors since the beginning of the year, gaining only 5.1% to RM1.04. Nevertheless, this makes the stock’s valuation more attractive, with almost all the analysts polled on Bloomberg calling a “buy” or “outperform” on the stock, with an average target price of RM1.59.
Analysts continue to like Muhibbah, given its huge outstanding order book of RM4.2 billion, which could keep it busy for the next three years. Also, as prices of raw materials such as steel decline, construction margins tend to improve.
