PETALING JAYA: Malaysia Marine & Heavy Engineering Holdings Bhd
’s (MMHE) group-wide transformation programme aimed at reversing the financial setbacks of the recent past and positioning itself for long-term growth is gaining momentum.
TA Research, in a note following a site visit to MMHE’s yard operations in Pasir Gudang, Johor, noted MMHE’s core turnaround strategy involves a multi-pronged approach to efficiency.
The company has streamlined its procurement processes and implemented a centralised production system, while adopting construction-led engineering to better manage resource planning.
These internal shifts have already begun to bear fruit, resulting in shortened procurement lead times and improved productivity.
Furthermore, MMHE is investing RM150mil to RM200mil in yard modernisation at its Pasir Gudang facility with the focus on automation and digitalisation, such as the introduction of an automated panel line, to enhance resource utilisation.
The goal is to bring marine repair turnaround times down to 15 to 16 days, a target that would make the yard competitive with regional leaders in Singapore and China.
TA Research noted MMHE’s operational turnaround is already gaining traction, reflected in the heavy engineering group’s consistent quarterly profitability since the first quarter of financial year 2024.
A growing order book also provides multi-year earnings visibility more so as MMHE is increasingly moving into high- value floater conversion projects.
The research house maintained its “buy” call on MMHE with an unchanged target price of 58 sen a share.
