PETALING JAYA: Malaysia Marine & Heavy Engineering Holdings Bhd
(MMHE) is poised for stronger earnings momentum as its heavy engineering (HE) segment enters a higher-margin phase, supported by a robust order book and improving project execution, according to analysts.
TA Research maintained its “buy” call and raised its target price to 59 sen from 58 sen, while MBSB Research also retained its “buy” recommendation and lifted its target price to 59 sen from 57 sen.
Both research houses cited the stronger-than-expected first-half performance, particularly from the HE segment, as the key reason for their more positive earnings outlook. TA Research raised its financial year 2026 (FY26) to FY28 earnings forecasts by 11.4%, 11.3% and 11.1% respectively, after raising its HE earnings margin assumption by 50 basis points to 4%.
It said the segment is entering a stronger earnings phase as ongoing projects progress into higher construction stages, helped by improved execution following MMHE’s transformation programme.
It highlighted MMHE’s RM4.1bil HE order book as of the second quarter of FY26 (2Q26), providing earnings visibility through 2029.
Further replenishment could come from the remaining seven of 11 PTT Exploration and Production Public Company Limited wellhead platforms that are not yet included in the order book, with another work order potentially expected in the 4Q26.
Beyond conventional oil and gas fabrication, MMHE is also expanding into energy-transition opportunities.
TA Research said its TenneT offshore wind contracts remain intact following their novation to L&T, with the IJmuiden Ver Alpha project 32% complete as of the 2Q and fabrication for Nederwiek 1 expected to begin in 4Q.
MBSB Research cautioned that steel price inflation, labour shortages and fixed-price contract overruns remain execution risks.
Nevertheless, it believes MMHE will continue to prioritise contract quality over volume while bidding across conventional offshore structures and renewable and new-energy infrastructure.
MBSB Research raised its FY26 to FY28 earnings forecasts by 13%, 15% and 15% respectively, while TA Research expects core net profit to reach RM149.1mil in FY26 and RM154.2mil in FY27.
The improving HE margins, visible order book and potential new awards, therefore, provide the clearest catalysts for MMHE, although marine weakness and broader energy-sector uncertainties remain key risks to watch.
An analyst told StarBiz that MMHE’s net profit surged to RM62mil implying a healthy net margin of 6.2%.
