mmhe 20110104 mib initiating coverage 3 440

Initiating Coverage 4 January 2011

4 January 2011

Maybank IB Research PP16832/04/2011 (029339)

At the cusp of a super-cycle boom

Initiating coverage with a Buy and RM6.50 target price. Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) is Malaysia’s most prominent offshore fabrication operator directly benefiting from PETRONAS’ development programmes. MHB offers strong earnings visibility, sustainable order book and tender pipeline. Its market leadership and PETRONAS’ pedigree parentage put it on a higher perch in securing the major jobs. We expect MHB to be a strong beneficiary of sizeable E&C and marine conversion jobs soon.

In an entrenched position to ride on PETRONAS’ E&Ps. Prospects are bright for MHB to capitalise on PETRONAS’ rising capital expenditure programme. Domestic order book visibility is strong and sustainable with opportunities in the deepwater, shallow, brown and marginal fields. MHB is also set to profit from PETRONAS’ increased E&P activities in Turkmenistan and Iraq. Outstanding order book stands at RM6b while the tender book is about RM9b. Altogether, there are RM25b worth of PETRONAS jobs for grab over the next 18 months.

Technip opens doors to higher value-added jobs. The strategic tie-up will further enhance MHB’s reputation and capability in the highly technical engineering & construction, and marine conversion jobs relating to FLNG, FSU and FSRU. These are beyond MHB’s existing capabilities. The tie-up will also give MHB an immediate foothold in the subsea market. France’s Technip is among MHB’s largest shareholder with an 8% stake, after MISC with a 65% interest.

Strong earnings growth potential. We project a 26% 2-year net profit CAGR fueled by clear order book visibility and tender pipeline. Malikai’s deepwater, Tapis’ EOR, Turkmenistan Block 1 Phase 2, Iraq venture, and floater orders are some of the RM25b contracts that MHB could secure. Margins are set to rise as MHB executes more hybrid and fixed-priced projects and reduces its cost-plus billings. MHB targets RM1b net profit by 2015, which implies a 29% CAGR.

Market leadership warrants market leading valuations. We value MHB at RM6.50, based on 22x CY12 EPS, 25% premium over its SEA peers. The domestic O&G sector is just at the beginning of a cyclical upturn, supported by PETRONAS’ huge capex programme. The sector has hit 26x price-earnings multiple in the previous up-cycle, and our 22x target reflects a capex-fueled, order book-driven environment. MHB – Summary Earnings Table FYE Mar (RM m) 2009A 2010A 2011F 2012F 2013FTurnover 4,021.1 6,147.0 4,276.6 4,088.2 4,360.7EBITDA 373.4 407.6 408.0 456.4 502.8Recurring Net Profit 278.3 279.2 382.1 439.9 482.8Recurring EPS (sen) 17.4 17.5 23.9 27.5 30.2EPS growth (%) 44.6 0.3 36.9 15.1 9.8DPS (sen) 0.0 0.0 3.2 3.7 4.0

PER (x) 33.9 33.8 24.7 21.5 19.6EV/EBITDA (x) 25.3 22.0 20.0 18.5 17.2Div Yield (%) 0.0 0.0 0.5 0.6 0.7P/BV (x) 10.3 7.9 3.4 2.9 2.6

Net Gearing (%) 2.3 cash cash cash cashROE (%) 35.7 26.4 19.0 14.6 14.0ROA (%) 16.2 10.2 7.6 8.1 8.2Book Value (RM) 0.57 0.75 1.76 2.01 2.29Source: Maybank-IB

Malaysia Marine and Heavy Engineering Holdings Buy Share price: RM5.90 Target price: RM6.50

Wong Chew Hann, CA [email protected] (603) 2297 8688

Description: A leading heavy engineering and marine service provider with 3 core businesses: (i) engineering & construction, (ii) marine conversion and (iii) marine repair Information: Ticker: MMHE MK Shares Issued (m): 1,600.0 Market Cap (RM m): 9,440.0 3-mth Avg Daily Volume (m): 6.14 KLCI: 1,533.42 Major Shareholders: % MISC BHD 64.6 TECHNIP SA 8.0

Price Performance:

52-week High/Low RM6.04 / RM3.80

1-mth 3-mth 6-mth 1-yr YTD

20.4 - - - -

Price Chart (RM5.90)

MMHE MK Equity

3.0

3.5

4.0

4.55.0

5.5

6.0

6.5

Oct

-10

Malaysia Marine and Heavy Engineering Holdings Berhad

4 January 2011

Table of contents

Page

Key investment merits 3

Introduction 4

Snapshot of MHB’s yards & track record

• MHB’s yards … 7

• Vis-à-vis regional yards 8

• Quality and quantity 9

• Strong operational track record 10

Domestic prospects & opportunities

• PETRONAS’ driven growth 11

• Deepwater offers the most potential 12

• Shallow water and EOR prospects also promising 15

• Marginal fields offers marine conversion jobs 17

Technip opens doors to higher value-added jobs 18

Turkmenistan offers visibility beyond Malaysian waters 21

Iraq set to be a main feature in coming years 22

Financials

• Order book prospects 23

• Financial projections 25

Valuation

• Equity value based on EV/EBITDA multiples 29

• Equity value based on PER comparisons 30

• Equity value based on EV/order book 31

Risks 32

Financial statements 33

Appendices

1. Group structure 34

2. Who’s who in MHB 35

3. Corporate and business milestones 36

4. Global expenditure programmes 37

5. Global yards (ex-Asia) 38

Glossary 39


4 January 2011

Key Investment Merits

MHB’s yards

Source: Compiled by Maybank-IB


4 January 2011

Introduction

A market leader in offshore fabrication. Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) is a heavy engineering and marine service provider organised under 3 core businesses:

(i) engineering & construction (E&C),

(ii) marine conversion, and

(iii) marine repair services.

MHB, one of Asia’s leading offshore fabricators, currently operates two fabrication yards – the Malaysian yard is located at Pasir Gudang, Johor, whilst the overseas yard is based in Kiyanly, Turkmenistan.

Well endowed assets. The Pasir Gudang yard infrastructure includes a 1.8km seafront, and it is the single largest fabrication yard in Malaysia (by annual tonnage capacity). It is also equipped with comprehensive and integrated facilities.

Eminent track record to boot. MHB’s dry-dock facilities are also among the largest in Asia. MHB is the only operator in Malaysia that offers:

(i) construction of deepwater structures (an emerging market),

(ii) marine conversion work, and

(iii) marine repair services,

all undertaken at a single location.

PETRONAS: Strong shareholder with history of adding value. MHB is owned by PETRONAS, Malaysia’s National Oil Company (NOC) via PETRONAS’ ownership of MISC Bhd. This is a unique distinction in the industry, because most of the regional yards are independently-run. We believe MHB offers the best exposure to PETRONAS’ upstream and midstream ventures compared to the other three PETRONAS-related listed companies i.e. MISC, Petronas Gas, and Petronas Dagangan.

MHB – PETRONAS-linked entity

Sources: Company, Maybank-IB

Engineering & Construction leads earnings base. MHB’s E&C division has consistently been its largest earnings contributor over the past three years, accounting for 59-91% of Group’s revenue.


4 January 2011

MHB: Revenue breakdown FY08: RM1,742m FY09: RM4,021m FY10: RM6,147m

41%59%

Engineering and Construction

Marine Repair and Conversion

24%

76%


Marine Repair andConversion

9%

91%


Marine Repair and Conversion

Source: Company Source: Company Source: Company

Snapshot of MHB’s 3 core businesses

E&C – Malaysia

One of only seven PETRONAS licensed contractors with exclusive rights to fabricate offshore structures for Malaysia’s Petroleum Sharing Contractors (PSCs).

Provides a full range of oil & gas (O&G) construction and engineering services; from detailed engineering design and procurement to construction, installation, hook-up and commissioning (EPCIC).

Has the ‘single largest’ fabrication yard (321,000m²) in Malaysia by annual tonnage capacity (69,700t) and load-out facilities (40,000t).

Equipped with comprehensive and integrated facilities (151ha complex) with a 1.8km seafront in Pasir Gudang, Johor.

The only yard in Malaysia with the track record and proven capabilities to construct complex deepwater structures.

Fabricated largest SPAR operating outside the Gulf of Mexico (GoM) and deepest SPAR installed in Asia.

Market share:

Topside fabrication in Malaysia (on tonnage capacity) Ranked #1: 27%

Global semi-submersible construction: 6% (2003-10)

Global SPAR construction: 9% (2003-10)

Sources: Company, Maybank IB

E&C – Turkmenistan

Operates and manages on behalf of Petronas Carigali (Turkmenistan) Sdn Bhd.

The only topside fabrication yard in Kiyanly, Turkmenistan. Has an open area of 100,000m² on a 44ha complex.

Able to fabricate up to 25,000MT a year (on current capacity).

One of six yards in the Caspian region with the experience to manufacture offshore O&G topsides.

This business enterprise is a 60:40 joint venture (JV) with Technip Geoproduction (M) Sdn Bhd via MMHE-TPGM Sdn Bhd. Up to now, this entity has been operating in Turkmenistan through MMHE only.



4 January 2011

Marine conversion

Offers one-stop centre for converting vessels such as:

Very Large Crude Carriers (VLCC),

petroleum tankers (i.e. Aframax), and

offshore oil rigs into floating structures:

- Floating, Production, Storage and Offload vessels (FPSO),

- Floating, Storage, Offload vessels (FSO),

- Mobile Offshore Production Unit vessels (MOPU), and

- Mobile Offshore Development Unit vessels (MODU).

The only yard in Malaysia that has completed FSO and FPSO conversions.

Its comprehensive range of conversion services range from engineering design to fabrication, installation and commissioning of these structures.

Has one of the largest dry-dock facilities in South East Asia (SEA) to support vessels or structures of up to 450,000 dwt.

Owns one of the largest ship lift systems, capable of lifting vessels and structures of up to 50,000MT.

Market share for conversion jobs in:

Malaysia (FPSO/ FSO): 100%

Global (FPSO): 4% (2003-12)

Global FSO: 12% (2003-12)


Marine repair

Offers the largest dry-dock facilities in Malaysia.

Only yard in Malaysia and among three operators in SEA to carry out repair or refurbishment of LNG carriers.

Able to handle three refurbishment projects concurrently (i.e. 1 VLCC and 2 Aframax vessels).

A 70:30 JV with Samsung Heavy Industries via MMHE-SHI LNG Sdn Bhd to repair and dry-dock LNG carriers since 2006.

Market share for LNG repair in:

Malaysia: 100%

SEA: 30%



4 January 2011

Snapshot of MHB’s yards & track record

MHB’s yards …

Pasir Gudang yard facilities Kiyanly yard facilities

Dry-dock

Open Fabrication Yard Area

Workshops

Shiplift

Landberth

Quay

Other Facilities

• 35 workshops covering an area of99,000 sqm (including a fully equip-ped, covered cutting and assemblyworkshop, service workshop andproduction workshops)

• 5 fabrication areas: 321,400 sqm• 3 skid tracks and 2 bulkheads, one up to 40,000MT and the other up to 12,000MT

• 1 skid track up to 6,000MT

• 2 landberths (each 345m in length)

• 7 quays (lengths of up to 368m)

• 2 dry-docks (one up to 450,000 dwt measuring 385m x 80m x 14m and the other up to 140,000 dwt measuring 270m x 46m x 12.5m)

• 1 LNG Carrier Repair Facility• 3 Global Test Control Room• 1 Cryogenic Workshop (557.8 sqm)• 1 Invar Welding Training Centre

(84.28 sqm)

• 1 shiplift (188.4 x 33.8m x 8m draftwith lift capacity of 50,000 dwt)

Facility Area

Covered FabricationYard - Main Fabrication Shop

Covered Fabrication Yard - Pipe Shop

Covered Fabrication Yard -MaintenanceWorks

Covered Fabrication Yard - Paint Shop

Open Blasting and Painting Area

• 436,000 sqm and a total tonnagecapacity of 25,000MT p.a.

• 86m x 25 m x 11m, equipped with20MT overhead crane

• 30m x 10m x 8m, equipped with a10MT overhead crane

• 86m x 15m x 11m, equipped with10MT overhead crane

• 20m x 10m x 5m

• 50m x 75m

Source: Company


4 January 2011

Vis-à-vis regional yards

Snapshot of Malaysia’s yards and capabilities

Source: Compiled by Maybank-IB Snapshot of Asia’s and the Caspian region’s yards (ex-Malaysia)

The Caspian region

•AMEC-Tekfen- Azfen•J. Ray McDermott•Keppel Corporation (2)•CNRG•MHB

India

•ABG Shipyard•Cochin Shipyard •Larsen & Toubro •Hindustan Shipyard •Bharati Shipyard

Singapore

•Sembcorp•Keppel•Dubai Drydocks

Japan

•Mitsubishi Heavy Ind.•Mitsui Engr & Shipbuilding•Japan Drilling Co.

South Korea

•Hyundai Heavy Ind.•DSME•Samsung Heavy Ind.•Shinhan Machinery Co.

Thailand

•Cuel•Lamprell

Indonesia

•Saipem•Dubai Drydocks•Beng Kuan Marine

China

•Shanghai Waigaoqiao Shipyard •Dalian Shipbuilding Offshore•Yantai CIMC Raffles Shipyards Ltd•Keppel Hantong Shipyard•COOEC

The Philippines

•Atlantic, Gulf &Pacific

Source: Compiled by Maybank-IB

Legend

● Marine conversion ● Marine repair ● Deepwater project ● Engineering and construction

Sarawak

Brooke Dockyard ●

Johor

MHB ● ● ● ● Sime Darby Engineering ● Lion Rig Builder (Planned)

Malacca

OilFab ●

Perak

Kencana Petroleum ●● UMW Fabritech (Planned)

Penang

BHIC ● ●


4 January 2011

Quality and quantity

Single largest fabrication yard in Malaysia, by tonnage & load-out facilities

Sime Darby Pasir Gudang

KencanaSime

Darby BSime

Darby C

Sime Darby A

Brooke

MHB Pasir Gudang

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Annual tonnage capacity (MT)

Maximum load-out facilities (MT)

Sources: Company, Data on the other companies are from the respective companies

Top regional yard in SEA, by length of dry dock

385

384

380 380 380

377

378

379

380

381

382

383

384

385

MHB Pasir Gudang Sembawang Premier

Jurong Shipyard 3 Hyundai 2 Keppel Admiral

Length (m)


Top regional yard in SEA, by quoted dwt dock capacity

500450

400 400 400

050

100150200250300350400450500

Jurong Shipyard 3 MHB Pasir Gudang Hyundai 2 Keppel Admiral Sembawang Premier

Quoted maximum (000 dwt)



4 January 2011

Strong operational track record

E&C track record since inception, no. of jobs done

62

35

1515

104

141

Mod

ules

, Pla

tfor

ms

& To

psid

es

(incl

udin

g Li

ving

Q

uarte

rs)

Jack

et &

Su

bstru

ctur

es

Turre

ts

Oth

ers

Jack

et w

ith

eith

er T

opsi

de

or M

odul

es

Dee

pwat

er F

PS

(FPS

O, S

PAR

, FS

O) To

tal

Source: Company Marine conversions track record in FY08-10, no. of jobs done

5

8

6

193

4

1 8

2008 2009 2010 FY08 - FY10

FSO, FPSO & MOPU Newbuilds & Others

Source: Company Marine repairs track record in FY08-10, no. of jobs done

22

18

15

5522

28

31

81

4

16

14

34

4

9

619

5

2

8 15

57 73 74 2042008 2009 2010 FY08 - 10

Rigs & MOPU Container & Bulk Carrier Tankers LNG & LPGOthers

Source: Company


4 January 2011

Domestic prospects & opportunities

PETRONAS-driven growth

Riding on growing opportunities. Prospects are bright for all of MHB’s businesses as commodity prices and economic (including O&G) activities recover. MHB should enjoy better order book visibility at its three core businesses (i.e. E&C, marine conversion and marine repair services) as PETRONAS raises its capex programme and places greater focus on its domestic and Turkmenistan operations.

PETRONAS raises capex by 8% YoY to RM40b in FY11. In its official announcement, PETRONAS has revealed a higher capex plan for FY11 (YE Mar). The RM40b budget is 8% higher than FY10’s, and the bulk of it will be spent locally. Operationally, contracts are flowing again and job enquiries rising. With replenishment risk abating, these indicators suggest that sector fundamentals are at the cusp of recovery.

PETRONAS’ capital expenditure (RM’b)

Sources: PETRONAS, Maybank-IB

Major oilfields development. As PETRONAS searches for higher recoverability of hydrocarbons from existing fields and develops new complex frontiers, we foresee opportunities for MHB in four key areas:

(i) deepwater,

(ii) shallow,

(iii) marginal, and

(iv) brownfields

From a top-down business perspective, we expect MHB to enjoy sustained growth as demand for its services should strengthen from increased exploration and production (E&P) activities. MHB stands to gain from stronger order flows, which optimises its yard space along the way. The details of our arguments on MHB’s prospects are outlined in the ensuing pages.


4 January 2011

Deepwater offers the most potential

Industry prospects: - Malaysia is well positioned as a regional deepwater centre.

Malaysia’s deepwater activities, actively promoted by PETRONAS, are expected to play a prominent role in the industry’s E&P development as it is one of the most effective ways to increase reserves and production.

Malaysia: Oil reserves (5.25b barrels) Malaysia: Gas reserves (87.95t cu ft)

Deepwater, 26%

Shelfal oil, 74%

Deepwater, 96%

Shelfal oil, 4%

Sources: PETRONAS, Maybank IB Sources: PETRONAS, Maybank-IB - Deepwater fields have larger reservoirs, higher flow rates.

Deepwater finds are most likely to produce 500m barrels of oil per field. It is anticipated that these deepwater blocks could contribute about 150,000-250,000 bpd of Malaysia’s future oil production.

Malaysia’s deepwater reserves potential

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Gumusut-Kakap650 m bbl

Metres below sea level

Jangas81 m bbl

Malikai108 m bbl

Ubah Crest215 m bbl

Kamunsu401 m bbl

Pisangan56 m bbl


- Deepwater to contribute 1/3 of Malaysia’s production. PETRONAS expects the deepwater sector to contribute 30-40% of Malaysia’s O&G production over the next 10 years, in line with the growing trend in the region. A total of 17 deepwater PSCs have been awarded to-date, covering 119,000sq km. At present, only one is at the production stage.


4 January 2011

Malaysia’s oil production: Shallow and deepwater fields

0% 20% 40% 60%80%

100%

2013F

2012F

2011F

2010A

Deepwater Shallow water

Source: PETRONAS

- Deepwater blueprint offers visible roadmap. We gather that 8 deepwater projects will be implemented. The Kikeh field is Malaysia’s first deepwater production field, which was successfully commissioned on 17 Aug 2007 with an oil production rate of 120,000 bpd. Gumusut-Kakap field is up next, by 2012 and will be followed by several others.

Malaysia’s implementation of deepwater projects

2007 Future development field projects

Kikeh

Gumusut/Kakap

Malikai

Indicative First Oil Kebabangan Exploration Strategy

Exploration Jangas

Appraisal & Reservoir Evaluation Field Development Studies Ubah Crest

Preliminary Engineering Project Implementation Pisangan

Kamunsu


Opportunities for MHB: - Entrenched position to leverage on the deepwater boom. We

believe Malaysia’s increasing deepwater developments require local engineering, fabrication and manufacturing support. MHB has the expertise, and we expect it to continue benefiting from Malaysia’s deepwater projects, as it rides on opportunities in offshore facilities fabrication, and hook-up and commissioning jobs.


4 January 2011

With 6 other domestic deepwater fields earmarked for future development, MHB is in for an interesting time. We take a view that every deepwater field requires a floating structure, at the very least for its production solutions.

- Upcoming Malikai requires a TLP and a FPSO. The Malikai field is expected to be Malaysia’s next deepwater project. We expect PETRONAS to pursue a tension-leg platform (TLP) structure, supported by a floating production storage and offloading (FPSO) unit for the Malikai deepwater project. Construction of a TLP alone would cost about RM2b, a sizeable addition to MHB’s order book.

MHB has a high probability of clinching these E&C (TLP) and marine conversion (FPSO) jobs, based on its track record. It has garnered a 100% success rate in taking up and delivering Malaysia’s deepwater construction structures to-date. Kikeh’s SPAR was fabricated and installed in 2007. Gumusut-Kakap’s semi-submersible floating production system (FPS) will be commissioned in 2012.

- Regional deepwater opportunities beckon. With Malaysia pioneering deepwater development in Asia, there are also opportunities for MHB to tap onto the deepwater development projects in the region, namely Thailand, Indonesia and Vietnam over the next few years.

PETRONAS’ deepwater blocks worldwide

Source: PETRONAS

Deepwater hotspot

Emerging hotspot

● Carigali operated block (COB)

● Operated by others (OBO)

● Joint operated block (JOB)

OBO (Mauritania)

1 block

CBO (Mauritania)

2 blocks

CBO (Cuba)

4 blocks

OBO (Cameroon)

2 blocks

COB (Mozambique)

3 blocks

OBO (Malaysia)

11 blocks

COB (Myanmar)

3 blocks

OBO (Indonesia)

3 blocks

COB (Malaysia)

7 blocks

Gulf of Mexico

Offshore Brazil

North Sea

West Africa

● OBO (Greenland)

2 blocks

●

OBO (Egypt)

2 blocks

OBO (Mozambique)

1 block

OBO (Vietnam)

1 block

JOB (Malaysia)

1 cluster ● ●

●

●

●

●

●●● ● ●


4 January 2011

Shallow water and EOR prospects also promising

Industry prospects: - Tapping into opportunities in shallow water and brownfields.

Despite the emphasis on deepwater prospects, PETRONAS will also be equally focused on developing shallow water and brownfields prospects as there are still ample hydrocarbon resources unexploited there.

- 65-70 new platform structures for shallow waters in 5 years. 22 new open shallow water blocks, covering over 240,000 sq km are open and available for data review. Based on PETRONAS’ announcement, there is a need to construct 65-70 (small and large) fixed structures and platforms for its domestic operations over the next 10 years.

- Brownfield projects are also key focus area, with abundance of opportunities, considering that PETRONAS intends to rejuvenate brownfields to optimise their productivity levels. These fields will be rejuvenated through enhanced oil recovery (EOR) programmes. It is estimated that EOR implementation in Malaysia will add 166,000 bpd (+28%) to annual oil production by 2020. EOR potential in Malaysia is massive and is estimated to be at approximately 2b stock tank barrels.

- EMEPMI prepares major tenders for Tapis field. ExxonMobil Exploration and Production Inc (EMEPMI) and PETRONAS Carigali Sdn Bhd (PCSB) are carrying out a tender exercise for a major new Centralised Processing Platform (CPP), upgrading of existing wellhead platforms and pipeline replacement work for the Tapis field. This is a centerpiece of a multibillion dollar rejuvenation programme. The construction contract is expected to be awarded by early 2011 whilst offshore installation may take place in 2013.

Opportunities for MHB: - Good chance of landing EMEPMI’s CPP project. Fabrication

work on the CPP, which includes a 20,000 tonne topside and a 6,000 tonne eight-legged jacket is expected to take 18-24 months. With the contract to be awarded by early 2011, we expect MHB to have the available yard space for fabrication works, as existing topside construction jobs for Tangga Barat and Kinabalu should be completed by 2011-12.

- EOR programmes at 6 brownfield projects. Notwithstanding the Tapis field CPP structure potential, about USD2.1b has been committed by EMEPMI and PETRONAS for Enhance Oil Recovery (EOR) brownfield projects at Seligi, Guntong, Semangkok, Irong Barat, Tabu and Palas. Again, we expect MHB’s chances of securing some works to be strong, on the back of its track record.


4 January 2011

New exploration play- types resulted in new discoveries

Legend: Sediment Thickness (m ) >1,000≤ 4,000 ≥ 4,000

Proven Successful Play-types

On-going Studies

Fractured Basement in Malay Basin (Anding Utara)

Sarawak Basin Deep Play

Turbiditites Play in Central Luconia (Kumang) Half- graben play in Tatau Province

Deep-seated Pinnacle Reef Play in Central Luconia (Kanowit, PC 4, Anjung)

Turbidites/ Hydrodynamic Play in DW Sabah

Malay Basin Centre HPHT Gas Play (Guling Deep) Turbidites Play in Sandakan Basin

Malay Basin Centre Oil Play (Sepat Deep) Syndrift Play in UDW Sabah

Malay Basin Syndrift Play (Kecubung) Turbidites Play in Sabah Shelf

Sarawak Basin Syndrift Play (KT) Fractured Basement in Malay/Penyu Basin

DW Sarawak Fault Block Play (Talang) HPHT Play in Baram Delta

DW Sabah Turbidities Play (Kikeh, Gumusut) Low Co2 Gas Play in Rajang Delta

DW Sabah Foldbelt Play (Rotan, Biris)

Source: PETRONAS

A K

J

B L

C M

D N

E O

F P

G Q

H R

I S


4 January 2011

Marginal fields offer marine conversion jobs

Industry’s prospects: - Marginal field development should also see rapid progress, as

PETRONAS aims to optimise production, development and production activities. Small, marginal fields will be developed through innovative solutions to achieve a faster pace of oil & gas discoveries. Several marginal field projects have been identified for fast-track for development.

- Unlocking marginal fields potential could lift Malaysia’s annual oil production by 55,000 bpd (+10%) by 2020 considering that a significant proportion of Malaysia’s remaining sources lay in fields of sub-20m barrels of recoverable oil. Up to 90 hotspots in 25 marginal fields have been identified in Malaysia waters with 10 fields ready for development.

- Floating structure opportunities on the rise. We gather that ‘design competition’ tenders for three marginal fields, namely Sepat, Cendor Phase 2 and Berantai are being carried out. We think that Sepat requires a wellhead platform, a FSO and MOPU whilst Cendor Phase 2 requires a stand-alone FPSO vessel for its development programme. These marginal field projects, which require offshore floating structures, are estimated to cost about USD1b in total.

Opportunities for MHB: - MHB is a leading contender for these super structure jobs.

MHB’s Pasir Gudang yard is the only yard in Malaysia and one of a select few in the region that can undertake large marine conversion jobs, backed by its dry-dock facilities. As PETRONAS continues to develop local expertise, we expect these conversion jobs to be undertaken in Malaysia.

We rate highly MHB’s chances of clinching the new floater projects. Firstly, MHB has 2 sizeable dry-docks and an integrated yard to facilitate the conversion works and construction of offshore topside modules. Secondly, MHB has the track record, having consistently completed 19 conversion jobs over the past 3 years. Notable deliveries in the past include:

(i) FPSO Kikeh (converted from a VLCC vessel) in 2007,

(ii) FPSO Ruby II (converted from Aframax tanker) in Mar 2010,

(iii) MOPU Dana 1 & Dana 2 (converted from old rigs) in 2009-10.


4 January 2011

Technip opens doors to higher value-added jobs

A strategic shareholder. French-based Technip SA has an 8.0% equity stake in MHB, acquired from MISC at a 2% premium to MHB’s IPO institutional price of RM3.80/shr. This strategic shareholder raises MHB’s capabilities beyond the normal offerings of FSO, FPSO and MOPU conversions. Further, MHB’s chances of securing more technically challenging conversion jobs will improve considerably. Technip offers MHB:

elevation in technical capabilities and innovative technological development, and

a firm foothold onto technically demanding floating structure projects such as floating LNG vessels (FLNG) and floating storage regasification units (FSRU) with a track record to boot.

FSRU, FLNG projects worth USD3b on the cards. Beyond the FSO, FPSO and MOPU projects, PETRONAS is pushing ahead with its plans to develop two FSUs and a FLNG for its domestic operations. We suspect these are high-value, high-impact projects, probably to be out for bid in 2011-15. These projects are vital to address potential gas supply shortage in Peninsular Malaysia, which may occur as early as 2014. In our estimates, these projects would cost up to USD3b in total.

Technip’s entry is thus timely. Firstly, Technip’s FLNG solution is commercially viable. It has the engineering expertise and total solution (i.e. cryogenic flexible pipes, cryogenic pipe-in-pipe, processing system, FPSO, subsea services and product provider) for the FLNG job. Secondly, Technip has a proven FLNG track record to show as:

it has been contracted by Shell to construct a 3.5m tpa FLNG in 2009,

it was awarded a Front End Engineering and Design (FEED) contract to develop a FLNG of 2.7m tpa for Petrobras-BG-Respol-Galp Energia.

MHB has the yard space, MISC has the vessels. MHB’s parent company, MISC, should be able to offer LNG carriers for these conversion projects. Two vessels, MISC’s Tenaga Satu and Tenaga Empat, currently laid-up, could be deployed for conversion works.

Subsea market, another key growth area. Technip could also play a leading role in capturing subsea opportunities in Malaysia together with MHB as the nation develops its deepwater prospects. Technip’s technological innovation (i.e. flexible risers, intelligent flexible pipe, and excellent flow assurance performance), first class assets and architectural framework are proven for deepwater subsea challenges with over 3,000m water depth. The Nakika, Perdido and Chinook & Cascade deepwater fields are some of Technip’s key achievements in applying its technological solutions at deepwater fields.

Malaysia’s subsea market to grow by 87% over the next 3 years. According to market researcher, Instok, Malaysia’s subsea market is projected to grow by a 3-year sales CAGR of 87% over 2010-12. The subsea market is expected to increase by 2.4-fold to USD404m in 2010 as investment in the Gumusut-Kakap (Shell) development picks up and hit USD1.1b by 2012.


4 January 2011

Technip’s FLNG track record

Shell FLNG Petrobras Pre-Salt FLNG FEED

Client: Shell Gas & Power Developments BV

Technical data:

- 450m x 70m

- 3.5m tpa LNG capacity

- Associated LPG production

- Liquid production potential: >5m tpa

- Estimated topside weight: > 50,000t

Client: Petrobras-BG-Repsol-Galp Energia

Design competition:

- FEED contract signed in 2009

- FID 2011 to be followed by EPC tender

- 14m sm3/d associated gas imported from oil FPSO’s

- 2.7m tpa LNG

Source: Technip

Technip: A snapshot

Technip Société Anonyme (Technip), headquartered in France and listed on the Euronext Stock Exchange, is the world’s fifth largest player in project management, engineering and construction for the oil & gas industry. Technip designs and builds high-technology industrial installations. It possesses integrated capacity with recognised expertise in 3 fields:

Subsea structures. Technip is a key operator on this market. Its activities include the design, manufacture and installation of rigid and flexible subsea pipelines and umbilicals.

Offshore platforms. Technip has key expertise in developing and constructing offshore fixed shallow (i.e. TPG 500 and Unideck), deepwater (i.e. SPAR and semi-submersibles) platforms and floaters (i.e. FSO, FPSO, FLNG and FSRU).

Onshore mega complexes. Technip is a worldwide leader in refining and petrochemical units. It holds several propriety technologies and leads in the design and construction of LNG and gas treatment plants, hydrogen and syngas units.

Technip to emerge as a substantial shareholder. Technip will emerge as a strategic shareholder of MHB, acquiring between 8% - 9.9% stake in MHB.

Sources: Technip, Maybank-IB

Technip’s product for deepwater fields

Flexibles – 3,000m Flexibles – monitoring Rigid – heated pipe-in-pipe

Extend flexible riser water depth and pressure capability to > 3,000m through innovation solutions.

Initial results from ultra deep offshore test of 7”, 9” and 11” flexible pipe for sweet and sour services were successful

A new generation of intelligent measurement enabled flexible pipes

Joint development of advanced flexible pipe integrity and surveillance with Schlumberger.

Excellent flow assurance performance

Extension of current technology to include possibility for active heating of flowline system.

Source: Technip


4 January 2011

Technip’s technological solutions at various deepwater fields

Nakika (2004) Perdido (2008) Chinook & Cascade (2009)

Reeled pipe-in steel catenary risers

Water depth: 2,000m

SPAR operating with deepest water depth of 2,350m

Subsea pipelines with 2,950m depth

A new application of FSHR further to the PDET project with Petrobras

5 free standing hybrid risers

Water depth: 2,500-2,640m

Source: Technip

Malaysia’s subsea market by definition

111157

276 254 243166

404

559

1,093

0

200

400

600

800

1,000

1,200

2004 2005 2006 2007 2008 2009 2010F 2011F 2012F

SURF Subsea Equipment Subsea Services(USD' m)

Source: Instok


4 January 2011

Turkmenistan offers visibility beyond Malaysian waters

The Caspian region’s robust potential. The Caspian offshore is one of the most important sources of O&G production growth. The Caspian region holds 20% of the world’s oil and 45% of gas reserves. Russia’s O&G developments (notably the Vladimir Filanovsky development) and Kazakhstan’s developments (Kashagan field) are expected to become big buyers of topsides in the near future. Turkmenistan, bordering Kazakhstan in the north and Iran in the south also offers potential.

Partnering Technip in Turkmenistan. MHB ventured beyond the Malaysian borders in 2007 when it began operating and managing an open fabrication yard in Kiyanly, Turkmenistan on behalf of Petronas Carigali (Turkmenistan) Sdn Bhd to support the latter’s development programme there. The Kiyanly yard is the only yard in Turkmenistan. It is also one of only six yards in the Caspian region with the capability to fabricate offshore topsides. MHB is partnering Technip Geoproduction (M) Sdn Bhd under a 60:40 JV (MMHE-TPGM Sdn Bhd) for this venture.

Kiyanly yard turning “fertile”. The Turkmenistan venture has been a success, as it continues to provide MHB with order book visibility. Its fabrication contracts are worth RM5.6b to-date for the Block 1 Phase 1 project. Operating risk is negated by cost-plus clauses, which shields MHB from cost escalation, and geopolitical sensitivities. In light of the growing importance of the Caspian Sea’s operations, the Kiyanly yard is turning into an important division of MHB’s business activities. MHB is embarking on a development plan to expand its yard facilities there.

Mid and long term prospects. In the midterm, we foresee that the Block 1 Phase 2 contract, which should be rolled-out by FY12, will replace the Block 1 Phase 1 order book, ending soon. We expect the Phase 2 contract to be similar to Phase 1, in terms of equipment to be fabricated but slightly smaller in value. As the yard undergoes further development, MHB’s long term aim is to work with other PSC contractors in Turkmenistan and EPC contractors in the Caspian region for offshore fabrication contracts and maintenance support services.

Key Caspian sea development projects Project Country Reserves

(mmboe) Start-up

date Est. Peak

Production ('000 bpd)

Est. Peak Date

Operator Production facilities

Kashagan Kazakhstan 10,285 2013 1,500 2023 NCOC Artificial Island ACG Azerbaijan 4,367 1997 1,030 2011 BP Fixed platform Shah Deniz (gas) Azerbaijan 2,930 2006 510 2018 BP Fixed platform Severnyi Russia 2,608 2010 370 2024 LuKoil Fixed platform Livanov Turkmenistan 1,664 2006 250 2021 PETRONAS FPSO/fixed platform SOCAR Assets* Azerbaijan 1,190 1949 410 1981 SOCAR Fixed platform Khvalynskoye (gas) Kazakhstan-Russia 898 2016 90 2018 LuKoil Fixed platform Cheleken Turkmenistan 833 1972 125 2015 Dragon oil Fixed platform Kalamkas More Kazakhstan 720 2018 160 2021 NCOC Fixed platform Pearls Kazakhstan 463 2018 100 2023 CMOC Fixed platform

Sources: Wood Mackenzie, Maybank IB; * State Oil Company of Azerbaijan


4 January 2011

Iraq set to be a main feature in coming years

Iraq to provide long-term alternative visibility. We also expect MHB to capitalise on PETRONAS’ recent venture in Iraq, in terms of E&C opportunities. PETRONAS has successfully secured 4 oil blocks after its bid in 2009. On a combined basis, these fields could produce 1.2-2.7m bpd of oil, equivalent to 4.5x of Malaysia’s domestic production.

We foresee maiden E&C order from as early as 2011. We anticipate the Iraq contract values to grow in size gradually as PETRONAS develops the fields there. Judging from the size of these fields, we do not rule out MHB setting up a fabrication yard in Iraq in the future (similar to its venture in Turkmenistan) to capitalise on the Middle East region’s long term oil & gas opportunities.

PETRONAS’ fields in Iraq Field Consortium

(% stake) PETRONAS

stake (%)

Output target

('000 bpd)

Reserves (b barrels)

Duration(year)

Inv (USD’b)

Majnoon Shell: PETRONAS: State Partner South Oil Co

30.0 700-1,800 12.6 10 NA

Halfaya CNPC: PETRONAS: Total: State Partner South Oil Co

18.8 300-535 4.0 13 NA

Badra Gazprom: KOGAS: PETRONAS: TPAO: State Partner South Oil Co

15.0 80-170 0.1 7 2

Gharaf PETRONAS: Japan Petroleum: State Partner South Oil Co

45.0 150-230 0.9 13 7-8

Sources: Various, Maybank IB

Snapshots on several of Iraq’s fields related to PETRONAS

Sources: Petroleum Economist, Wood Mackenzie, BP Statistical Review


4 January 2011

Financials

Order book prospects

Set to enjoy sustained growth. PETRONAS’ active domestic programmes send a strong signal that the pace of project roll outs is picking up. With the step up in awards valued at RM25b, we see exciting prospects for MHB as it capitalises on the strong order flow. These projects should optimise its yard space. We also see MHB’s fortune growing with Technip’s presence as it operates higher up in the value chain.

Strong replacement cycle outlook. Against this backdrop, we expect MHB’s outstanding order book, now at RM6b (24 months visibility) and tenders of RM9b (based on our estimates) to see a high replenishment rate over the next few years. Growth is expected to come from all its 3 businesses: E&C, marine conversion and marine repair services.

Outstanding order book Segments Billing Type (RM’m) Engineering and Construction EPC/EPCIC 3,509.1

Gumusut-Kakap Hybrid Turkmenistan Block 1 Phase 1 Cost plus

Topsides 1,310.5 Kinabalu Hybrid Tangga Barat Hybrid

Turrets 8.7 BP Angola External Turret Fixed price

Sub-total 4,909.4 Marine Repair

Tankers 2.5 Rigs & Others 5.4 LNG & LPG 25.3

Sub-total 33.2 Marine Conversion

Dana 256 4.0 Others 1,000.0 Total 5,946.6

Source: Company

Snapshot of business opportunities Opportunities Types of project Estd. Value

Upcoming deepwater fields (7)

Malikai

Floating production structures

Fabrication of TLP, conversion of FPSO

RM1-2b

22 new open shallow water blocks Fabrication of 65-70 fixed platforms NA

Brownfield rejuvenation programmes

Tapis

Fabrication of offshore structures

CPP, upgrade of existing wellhead platforms, pipeline replacement works

RM1-2b

EOR programmes

Seligi, Guntong, Semangkok, Irong Barat, Tabu & Palas fields

Fabrication of offshore structures

RM6-8b

Marginal fields

Sepat, Cendor Phase 2, Berantai

Marine conversion, repair

Conversion and construction of FSO, FPSO and MOPU

RM2-3b

Remote gas fields, gas regasification project Offshore floating structures

Conversion and construction of FSU, FSRU & FLNG vessels

RM9-10b

Subsea market Flexible risers, pipes, flow assurance performance RM1.3b

Rig/ tender barges Tender-assisted rigs RM0.5b

Turkmenistan project E&C of topsides and modules RM5b

Iraq project E&C of topsides and modules NA

Sources: Compiled by Maybank IB


4 January 2011

Business opportunities for regasification projects

Sources: Compiled by Maybank IB

Leading the race for some sizeable E&C jobs. We rate MHB high in benefiting from several high profile E&C contracts such as Malikai’s deepwater offshore project, EMEPMI’s Tapis CPP, Turkmenistan Block 1 Phase 2, Iraq and PETRONAS’ regasification project orders, which are all expected to roll out soon. We expect MHB’s E&C revenue to remain high at RM3-4b p.a. in FY11-13.

In the running for several marine conversion jobs. Notwithstanding the high-profile FSU, FSRU and FLNG projects, we believe the marginal field projects for Sepat, Cendor Phase 2 and Berantai which require:

(i) FSO, FPSO and MOPU vessels, and

(ii) two tender assisted-rigs

should keep MHB’s yard occupied, if MHB clinches these projects.


4 January 2011

Our financial projections Good earnings visibility 2 years out. MHB delivered RM278m net profit in FY09 and sustained at RM279m in FY10. We expect earnings trajectory to climb on the backdrop of rising order book and margins. We forecast MHB delivering net profits of RM382m in FY11 (+37% YoY) and RM440m in FY12 (+15% YoY), which imply commendable 2-year CAGR of 26%. Our main assumptions are RM3-4b order book replenishment p.a., and an uptick in blended EBITDA margin to 9.5% in FY11 and 11.2% in FY12 (FY09: 9.3%, FY10: 6.6%).

Growth to be driven by stronger margins… MHB’s gross margins are set to expand as it delivers a higher degree of hybrid (i.e. a combination of cost-plus and fixed-price/ lump-sum contracts) and fixed priced projects, and reduces cost-plus value jobs. The Gumusut-Kakap deepwater, Kinabalu and Tangga Barat jobs, which started out on a cost-plus basis are moving into the hybrid stage. Turkmenistan’s project is on a cost-plus billing method.

Billing methods: Margins versus risk (based on industry’s norm)

Source: Maybank-IB

Billing methods: Margins versus risk



4 January 2011

Gross margins versus Turkmenistan’s cost plus billings revenue

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Turkmenistan (LHS) Pasir Gudang (LHS) Gross profit margin (RHS)(RM 'm) (%)

Source: Maybank IB

And, tax benefits. We expect MHB to pay marginal taxes from FY11 owing to the recent Investment Tax Allowance (ITA) granted by MIDA under the Yard Optimisation Programme. We do not expect MHB to pay taxes on its Malaysia-income. In our view, the ITA allows MHB to derive tax credit on its yard optimisation (YO) capex of RM2.7b (ex-leased land). This incentive could be applied from 2006’s year of assessment for a period of 10 years.

Turkmenistan’s project to be equity accounted from 4Q FY11. The earnings, consolidated in the past, will be equity accounted from 4Q FY11 once the project is novated to MMHE-TPGM upon the completion and approval of the JV’s Permanent Establishment (PE) in Turkmenistan. MHB owns 60% of MMHE-TPGM but it will be classified as a jointly controlled entity after JV obtains its PE status.

Significant capex going forward. MHB is in its growth phase and will be incurring significant capex over the next few years – Pasir Gudang yard optimisation programme (RM2.2b), Kiyanly yard (RM107m) and other peripherals (RM137m). Also, there is a potential of a new yard in Iraq. As a result, we do not expect significant dividend payout in the near term. Our forecasts incorporate a 10% payout of net profit.

Clean balance sheet. MHB was in a net cash position of RM1.1b as at 30 Sep 2010 based on a gross debt of just RM1.4m and a huge cash balance of RM1.1b. Together with strong operating cashflows of RM352m (FY11) and RM443m (FY12) based on our estimates, this is sufficient to fund its expected capex programme of RM1.5b (total) in FY11 and FY12. We expect MHB’s balance sheet to remain clean with net cash of RM975m at end-2012 and RM797m at end-2013.


4 January 2011

Capex profile

0

200

400

600

800

2011F2012F

2013F

550.1 681.3626.7

83.9 23.5121.6 22.3

9.1

Yard Optimisation Kiyanly yard Other RM 'm

Source: Company

Pasir Gudang yard optimization programme: Productivity and capacity goals Ability to simultaneously complete multiple projects post Pasir Gudang yard optimisation exercise

Construction of deepwater structures (including hull and top-side) of up to 40,000MT on new skid-tracks and bulkheads

Concurrently carry out repair works for 2 LNG carriers and 4 VLCCs

Concurrently carry out conversion works on 3 FPSOs, FSOs or rigs

Incremental improvements upon completion of the Pasir Gudang yard optimisation programme

Project Selected details and specifications Existing area (sq m)

Planned area (sq m)

Fabrication, assembly anderection area

New fabrication area no.6 and new 25,000MT skid-track

321,400 391,400

Workshops and warehouse

New autoblast and primer, blasting and painting, MMHE-ATB and structural and piping workshops. New testing laboratory, warehouse and air-conditioned storage

100,400 160,043

Fabrication area capacity Maximization through yard optimisation programme

69,700MT 80,500MT

Source: Company

Pasir Gudang yard optimization programme: Overall development plan

Project Selected details and specification Projected cost

(RM m) Workshops

Rationalisation of workshops to improve efficiency and productivity for improved turnaround of production

Automation and construction of specialised enclosed work areas to improve efficiency and productivity

316.1

Capacity expansion - engineering and construction Installation of new capacity for engineering and construction activities

Construction of 25,000 tonnes bulkheads and skid-track, concreting of fabricating areas

448.6

Capacity expansion – repair and conversion Installation of new facilities for marine conversion and repair activities

Enlargement of existing dry-dock and installation of new facilities

632.2

Tonnage capacity expansion New and upgraded equipment for higher tonnage capacity

Acquisition and installation of floating crane, block transportation dolly and mechanical and engineering utilities

329.0

General General facilities and other items

Acquisition & installation of other general facilities

447.6

Total 2,173.5

Source: Company


4 January 2011

Valuation

We value MHB at RM6.50, based on 22x CY12 EPS. Our valuations may appear aggressive, but they are fair in a capex-fueled, order book-driven environment. The O&G sector has hit 26x price-earnings multiple in the previous up-cycle and we reckon the sector is just at the beginning of an upturn. Our 22x forward target multiple is premised on a 25% premium to its South-East Asian (SEA) peers’ average of 17x for MHB’s yard high profitability, efficiency and strong growth prospects backed by its existing order book and growth potential.

Sector historical PER valuations

0

5

10

15

20

25

30

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

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06

Jul-0

6

Jan-

07

Jul-0

7

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08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

(x) Kencana Sembcorp Marine Keppel Corp

Source: Bloomberg

Fabricators are the first in line to benefit (order book-wise) from capex recovery vis-à-vis other service providers. Timeline-wise, we foresee a rush of contract flows in the O&G sector from 1Q11 (as early as January). MHB’s market leadership and PETRONAS’ pedigree parentage put it on a higher perch in securing the major jobs. In retrospect, MHB is just one of few operators who have the privileged support of a national oil company (NOC), a major positive in our view.

Valuation methodology. In deriving the target price for MHB, we have looked at three methods of valuation: EV/EBITDA, PER and EV/order book, and conclude that the PER method is the most appropriate. Contract/order book driven businesses should realistically be assessed based on a multiple of some measure of earnings. DCF valuation is less practical, because earnings tend to be cyclical and order book visibility does not extend beyond 30 months. We believe MHB is fundamentally valued between RM6.9b (RM4.34/shr) to RM10.4b (RM6.50/shr) based on peer earnings and EBITDA multiples.

Peers comparison. We use market multiples of three South East Asia-based peers, Kencana Petroleum, Keppel Corp and Sembcorp Marine, because only these three companies:

operate fabrication yards that construct similar O&G structures, and

share similar political and operating risks.

North Asia operators (i.e. Hyundai Heavy Ind., Samsung Heavy Ind.) are structurally different, business-wise. These yards have construction capacity geared towards shipbuilding, which depresses their valuations.


4 January 2011

Valuation based on EV/EBITDA multiples

Peer comparisons of EV/EBITDA and growth (calendarised)

2-year EBITDA CAGR EV/EBITDA

(%) (x)

SEA-based 2011 2012

- Kencana Petroleum 20.8 12.6 11.0

- Sembcorp Marine (9.1) 10.0 9.6

- Keppel Corp (2.5) 12.0 11.7

Simple average 11.6 10.8

North-Asia based

- Hyundai Heavy Ind (2.8) 8.2 8.3

- Samsung Heavy Ind (2.1) 9.4 9.4

- Mitsubishi Heavy Ind 5.7 9.1 8.3

Source: Bloomberg

Premium valuations to peers. The EV/EBITDA multiples of the three SEA-based peers in the table above averaged 10.8x for 2012 earnings. Given that these peer multiples (ex-Malaysia) are pricing in declining EBITDA over 2011 and 2012 while we project a 2-year EBITDA CAGR of 7% for MHB, a premium over its peer multiples is justified.

Effectively the ‘PETRONAS parent’ premium. Malaysia-based O&G related companies’ orders are largely domestically-driven, supported by PETRONAS’ commitment to grow domestic production by 3% p.a. over the next 5 years, maintain oil output at 630,000 bpd whilst aiming to keep its status as a net oil exporting country. Its neighboring peers do not have the luxury of a National Oil Company support. Their order books are more dependent on unrelated customers’ capex programme.

Premium for yard profitability and efficiency. Malaysia-based companies also tend to demonstrate a more optimal use of yard space than Singaporean operators. MHB and Kencana’s average EBITDA per thousand tonne capacity multiple of 6.6-7.5x by far outstrips their Singapore peers of 0.4-0.5x.

Peer comparisons of EBITDA per unit capacity (calendarised) 2-year EBITDA CAGR EBITDA/ ‘000 tonne of

capacity

(%) (x)

SEA-based 2011 2012

- Kencana Petroleum 20.8 6.6 7.5

- Sembcorp Marine (9.1) 0.4 0.4

- Keppel Corp (2.5) 0.5 0.5

Simple average 2.5 2.8

MHB * 7.2 6.6 7.2

* Refers to FY12-FY13 for MHB Source: Bloomberg


4 January 2011

RM7b equity value. We believe a 25% premium over SEA-based peers’ EV/EBITDA is justified given MHB’s fabrication yard which derives higher profitability (EBITDA/tonne of capacity). This delivers RM7b in equity value, translating into RM4.34 per MHB share, which serves as the floor for its valuation.

Target price derived from EV/EBITDA computations FY12 FY13

MHB’s EBITDA 456.4 502.8

Peer EV/EBITDA multiple (x) * 11.6 10.8

Apply premium to peers: 0% 11.6 10.8

10% 12.7 11.9

25% 14.4 13.5

EV of MHB 0% 5,273.8 5,418.5

10% 5,801.1 5,410.4

25% 6,592.2 6,148.2

Net cash position 973.8 795.1

Projected equity value range 0% 6,247.5 6,213.6

(based on EV/BITDA) 10% 6,774.9 6,205.5

25% 7,566.0 6,943.3

Target price per MHB share range 0% 3.91 3.88

10% 4.24 3.88

25% 4.73 4.34

* We have used CY11-CY12 as peer comparables for MHB’s FY12-FY13 Source: Maybank-IB estimates

Valuation based on PER comparisons

RM10.4b equity value. Based on straight-forward application of peer PERs to its net profit, and a 25% premium to the peer PER average of 17x, we estimate MHB’s equity value to be RM10.4bn. This translates into RM6.50 per MHB share. We tactically believe a 25% premium (22x PER) to be sustainable and not aggressive, given the fabrication yard’s strong growth prospects (we estimate 26% 2-year net profit CAGR), greater earnings visibility, and huge order book enhancing potential.

Equity value derived from PER computations FY12 FY13

MHB net profit 439.9 482.8

Peer PER multiple (x) 17.8 17.2

Apply premium to peers: 0% 17.8 17.2

10% 19.5 18.9

25% 22.2 21.5

Projected equity value range 0% 7,812.6 8,304.5

(based on PER) 10% 8,593.9 9,134.9

25% 9,765.8 10,380.6

Target price per MHB share range 0% 4.88 5.19

10% 5.37 5.71

25% 6.10 6.50

Source: Maybank-IB


4 January 2011

Valuation based on EV/order book

In the table below, we compare a company’s EV versus its order book. MHB’s peers have a market EV range of 1.9 – 3.6x. Applying the lowest EV/order book multiple in the range (1.9x) yields a computed EV of RM11.4b for MHB and an equity value of RM12.4b. Applying the highest peer average of 4.1x yields an equity value of RM25.6b. At our established RM7.6b – RM10.2b equity value (from previous sections), the implied EV/order book for MHB is only 1.2x to 1.6x.

MHB’s order book may be valued lower by the market for now versus regional peers for several reasons:

We think the majority of MHB’s projects, to be recognised over the next 12-24 months, offer comparatively low margins owing to a higher procurement component undertaken for the early phases of these E&C jobs.

Singapore yards construct mainly offshore rigs and floating structures while MHB constructs fixed platform structures; the latter tends to yield lower margins. Such structures dominate the order book at the Turkmenistan yard and its cost-plus type contracts tend to depress margins too. Going forward, the nature of the structures being bid for and the presence of Technip may result in some margin restoration.

Peer Comparison of EV/order book Company Currency Share

price O/S order

book EV/ order

book

($) ($’m) (x)

- Kencana Petroleum RM 2.52 1,100 3.6

- Sembcorp Marine SGD 5.37 4,700 1.9

- Keppel Corp SGD 11.50 4,100 4.1

Simple average 3.2

Sources: Bloomberg, Maybank-IB

MHB’s implied EV/order book Company O/S order

book EV/ order

book Implied

MHB’s EV Implied

equity value (RM’b) (x) (RM’m) (RM’m)

MHB 6 1.9 11,426.4 12,401.2

4.1 24,613.2 25,588.0

Sources: Bloomberg, Maybank-IB


4 January 2011

Risks

Contract award delays. MHB’s order book is dependent on offshore oil & gas field developments by PETRONAS and its contractors. These are subject to planning, regulatory and political hurdles which can delay field development and awards to fabricate offshore structures.

Oil price levels affect long term investment plans. PETRONAS and other oil majors’ investment plans are dependent on long-term oil price assumptions, which can be affected by low and/or volatile oil price levels. We have seen oil field exploration/developments shelved when oil price fell below USD50/bbl (average) in 2008, and there is no certainty this will not recur. Our economics team projects an average USD90/bbl crude oil price in 2011 (2010: USD80/bbl).

Competition from other PETRONAS-licensed fabrication yards. Six other fabrication yards are licensed to fabricate structures domestically; of these, 3 are active competitors for the PETRONAS jobs. These competitors may turn more aggressive in pricing their bids depending on the industry circumstances or for specific jobs.

Margin squeeze from cost inflation. Labour, MHB’s largest cost item, generally suffers from long-term upward costs pressure while steel is a volatile cost item. The latter is usually passed on to customers in cost-plus clauses in contracts.


4 January 2011

Financial statements

INCOME STATEMENT (RM m) BALANCE SHEET (RM m)

FY Mar 2010A 2011F 2012F 2013F FY Mar 2010A 2011F 2012F 2013F Revenue 6,147.0 4,276.6 4,088.2 4,360.7 Net Fixed Assets 928.9 1,654.3 2,347.9 2,946.7 Cost of goods sold (5,550.6) (3,727.0) (3,503.6) (3,733.2) Invts in Assocs & JVs 0.2 13.5 42.6 71.8 Gross profit 596.4 549.5 584.6 627.5 Other LT Assets 69.4 69.4 69.4 69.4 Other ope. (exp)/ Inc. (215.7) (171.7) (161.7) (161.7) Cash & ST Invts 765.9 1,602.1 1,280.3 1,102.6 EBIT 380.7 377.8 422.9 465.8 Other Current Assets 3,019.8 2,115.1 2,023.9 2,155.7 Net int (exp)/ Inc (3.5) (3.4) (3.4) (3.4) Total Assets 4,784.1 5,454.3 5,764.2 6,346.3 Associates & JV (0.0) 13.3 29.2 29.2 Exceptional gain/ (loss) (0.0) 0.0 0.0 0.0 ST Debt 2.9 2.9 2.9 2.9 Pretax profit 377.2 387.8 448.7 491.6 Other Current Liab 3,237.4 2,282.5 2,186.4 2,325.5 Tax (93.1) (2.7) (5.8) (5.8) LT Debt 302.6 302.6 302.6 302.6 Minority interest (4.9) (3.0) (3.0) (3.0) Other LT Liab 28.0 28.0 28.0 28.0 Net profit 279.2 382.1 439.9 482.8 Shareholders Equity 1,198.4 2,820.4 3,222.5 3,661.5 Net profit ex EI 279.2 382.1 439.9 482.8 Minority Interest 14.8 17.8 20.8 23.8 Total Cap. & Liab 4,784.1 5,454.3 5,764.2 6,346.3 EBITDA 407.6 408.0 456.4 502.8 Sales Gth (%) 52.9 (30.4) (4.4) 6.7 Share Capital (m shares) 1,600.0 1,600.0 1,600.0 1,600.0 EBITDA Gth (%) 9.2 0.1 11.9 10.2 Net Debt/(Cash) (460.4) (1,296.5) (974.8) (797.1) EBIT Gth (%) 8.9 (0.7) 11.9 10.1 Working Capital 545.3 1,431.7 1,114.0 928.0 Effective Tax Rate (%) 24.7 0.7 1.3 1.2 Gross Gearing % 25.5 10.8 9.5 8.3

CASH FLOW (RM m) RATES & RATIOS

FY Mar 2010A 2011F 2012F 2013F FY Mar 2010A 2011F 2012F 2013F Net Profit 279.2 382.1 439.9 482.8 Gross Margin (%) 9.7 12.9 14.3 14.4 Dep. & amort 26.9 30.2 34.5 39.0 EBITDA Margin (%) 6.6 9.5 11.2 11.5 Chg. In wkg cap 404.9 (50.2) (5.1) 7.3 EBIT Margin (%) 6.2 8.8 10.3 10.7 Other ope. CF 532.3 (10.3) (26.2) (26.2) Net Profit Margin (%) 4.5 8.9 10.8 11.1 Operating CF 1,243.3 351.8 443.2 502.9 ROE (%) 26.4 19.0 14.6 14.0 Net capex (260.0) (755.6) (727.1) (635.8) ROA (%) 10.2 7.6 8.1 8.2 Chg in LT inv 0.0 0.0 0.0 0.0 ROCE (%) 26.6 18.6 13.9 13.5 Chg in oth assets (260.0) (755.6) (727.1) (635.8) Interest Cover (x) 110.3 112.4 125.8 138.6 Investment CF (260.0) (755.6) (727.1) (635.8) Debtors Turn (days) 133.9 212.4 178.3 168.8 Net chg in debt 49.8 (0.0) (0.0) (0.0) Creditors Turn (days) 143.4 251.0 214.6 204.0 Chg in other LT liab. (501.8) 1,239.9 (37.8) (43.8) Inventory Turn (days) 2.8 3.2 2.7 2.6 Oth. Financing CF 0.0 0.0 0.0 0.0 Current Ratio (x) 1.2 1.6 1.5 1.4 Financing cash flow (452.0) 1,239.9 (37.8) (43.8) Quick Ratio (x) 1.2 1.6 1.5 1.4 Net cash flow 531.2 836.2 (321.7) (176.7) Net Debt/Equity (X) cash cash cash cash Capex to Debt (%) 0.9 2.5 2.4 2.1 N.Cash/(Debt)PS (sen) 28.8 81.0 60.9 49.8 Opg CFPS (sen) 52.4 25.1 28.0 31.0 Free CFPS (sen) 61.5 (25.2) (17.7) (8.3)

Sources: Company, Maybank-IB


4 January 2011

Appendix 1: Group structure

Snapshot of companies

Source: Company


4 January 2011

Appendix 2: Who’s who in MHB

MHB’s Operating Structure

Source: Company

Who’s who in key management Name Designation Remarks

Wan Yusoff bin Wan Hamat CEO/Executive Director & Managing Director

Honours degree in Engineering Production, University of Birmingham, UK

27 years of leadership roles in numerous PETRONAS businesses

Wan Mashitah binti Wan Abdullah Sani Chief Financial Officer Fellow member of the ACCA

8 years in MISC

Ausmal bin Kardin General Manager, Legal & Administration

LLB, University of Wales, Aberystwyth, licensed Company Secretary

11 years in MISC & 4 years in Bumi Armada Berhad

Manoel Francisco Avelino Gomes General Manager, Marketing & Sales MBA, Brunel University & Bachelor of Engineering (Mechanical), University of Singapore

Member of Institute of Engineers & Board of Engineers, Malaysia (BOEM) Professional Engineer (Mechanical)

11 years in MMHE

Rooyahaiti binti Yakub General Manager, Human Resource Masters in Human Resource Development, University of Hull, UK and Diploma in Human Resources Managements, Malaysian Institute of Human Resources Management

Previously involved in human resource management and development

Mohamed Za'aba bin Hj. Abbas General Manager, Engineering & Construction/Acting Head of Turkmenistan Operation

Diploma in Marine Engineering, Ungku Omar Polytechnic

18 years in MMHE in multiple technical capacities

Turkmenistan project steering committee chairman

Source: Company

The Board of Directors Name Designation Remarks

Datuk Nasarudin bin Md Idris Non-Independent Non Executive Director & Chairman

MBA, Brunel University, UK , Bachelor of Arts, University of Malaya

Stanford Executive Programme, Stanford University, USA


Dato' Halipah binti Esa Independent Non Executive Director Masters and Degree in Economics, University of Malaya, Certificates in Advanced Economic Management from IMF Institute USA and Kiel Institute of World Economics, Germany and Certificate in Advanced Management Programme from Adam Smith Institute, London

Served in the EPU and MoF from 1973 to 2006

Was previously a consultant to the World Bank and UNDP

Wan Yusoff bin Wan Hamat Non-Independent Executive Director & Managing Director/CEO of MHB

Honours Degree in Engineering Production, University of Birmingham, UK


Yee Yang Chien Non-Independent Non Executive Director & VP Corporate Planning and Development, MISC

Degrees in Financial Accounting/ Management and Economics, University of Sheffield, UK

7 years in MISC, 10 years involvement in Investment Banking & Auditing

Heng Heyok Chiang @ Heng Hock Cheng

Independent Non Executive Director Bachelor of Science in Chemical Engineering, University of Birmingham, UK

34 years of leadership roles in numerous Shell businesses worldwide

Captain Rajalingam a/l Subramaniam Non-Independent Non Executive Director & VP Fleet Management, MISC

MBA, University Utara Malaysia & Master certificate of competency- foreign going, Akademi Laut Malaysia (ALAM)

27 years in various roles in MISC

Datuk Khoo Eng Choo Independent Non Executive Director MBA, University of Bath, UK

Chartered Accountant and member of Malaysian Institute of Certified Public Accountants and Malaysian Institute of Accountants

Over a decade of service in PriceWaterhouseCoopers

Source: Company


4 January 2011

Appendix 3: Corporate and business milestones

Snapshot of its established track record and engineering achievements

Source: Company


4 January 2011

Appendix 4: Global expenditure programmes

Global deepwater expenditure (USD’b)

0

5

10

15

20

25

30

35

2004 2005 2006 2007 2008 2009 2010F 2011F 2012F 2013F

Western Europe North America Others Latin America Australasia Asia Africa

Source: Douglas-Westwood

Global offshore expenditure by region (2004-13)

0

50

100

150

200

250

300

350

400

2004 2005 2006 2007 2008 2009 2010F 2011F 2012F 2013F

Western Europe North America Middle East Latin America

Eastern Europe & FSU Australasia Asia Africa

(USD' b)


Expanding LNG capacity by region (2005-14)

0

50

100

150

200

250

300

350

400

2005 2006 2007 2008 2009 2010F 2011F 2012F 2013F 2014F

Western Europe North America Middle East Latin America

Eastern Europe & FSU Australasia Asia Africa

(mmtpa)


Global floating production expenditure (2004-13)

0

2

4

6

8

10

12

14

2004 2005 2006 2007 2008 2009 2010F 2011F 2012F 2013F

Western Europe North America Middle East

Latin America Eastern Europe & FSU Australasia

Asia Africa Order Year

(USD' b)



4 January 2011

Appendix 5: Global yards (ex-Asia)

Global yards (ex-Asia)

Source: Maybank IB


4 January 2011

Glossary

Aframax tankers : Class of crude carriers, with a loading capacity between 80,000 dwt and 120,000 dwt

bulkhead : A reinforced retaining wall at the seafront used to offload heavy structures from the yard onto transporting vessels

buoy : Unmanned floating structure used for mooring units offshore

chemical tankers : Chemical tankers equipped with appropriate machinery and fitted with inert tank linings, used to handle the transport of potentially corrosive chemicals such as sulphuric acid

cu. m : Cubic metres, the unit used tom measure the volumetric cargo carrying capacity of LNG carriers

deepwater : Water depths equal to or more than 300 metres

dry-dock : Narrow basin, typically in a shipyard, that can be flooded to allow a vessel to be floated in, then drained to allow the vessels to rest on a dry platform for maintenance and repairs

dwt : Deadweight tones, the measure used to measure ship capacity, equal to a vessel`s fully loaded weight minus the weight of the empty vessel

E&P : Exploration and production

employment : Aggregate ship capacity actually utilised to transport cargo

employment rate : Utilisation rate, the ratio between vessel utilisation and supply

EPC : Engineering, procurement and construction, used to describe a contract between a company and a contractor to perform detailed engineering, procurement of materials and construction of structures

EPCIC : Engineering, procurement and construction, installation and commission, used to describe a contract between a company and a contractor to perform detailed engineering, procurement of materials, construction of structures, transport to site, installation and commissioning (preparatory activities to commence operations)

FEED : Front-end engineering and design, includes the process of defining a project's basic systems (conceptual schemes), the detailed evaluation of these conceptual schemes in preparation for execution and the basic engineering conducted before project approval

FIELD : Geographical area under which an oil or gas reservoir lies. Also refers to an area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition

FPS : Floating production system a collective term for all types of floating production units, including FPSOs, semi-submersibles, TLPs, SPARs and FSOs. Semi-submersibles, TLPs and SPARs are normally deployed in locations with pipeline infrastructure, since they typically do not have storage facilities.

FPSO : Floating production, storage, offloading system, an offshore system comprising a large tanker equipped with a high capacity production facility. FPSOs are moored at the bow to the seabed to maintain a geo-stationary position, and serve as a fixed platform using risers to connect subsea wellheads to on-board processing/production, storage and offloading system

FSO : Floating, storage, and offloading, a vessel that stores crude oil produced from a fixer or floating platform

IOC : International oil company, large integrated oil and gas company operating in numerous countries around the world

jacket : Structure under a platform fixed to the seabed using piles

jackup : Mobile self-lifting unit comprising a hull and retractable legs used for offshore drilling operations

landberth : Onshore berth for vessel docking and repair

living quarters : Modules designed to provide living space for personnel working on an offshore platform

Source: Company


4 January 2011

Glossary LNG : Liquefied natural gas obtained by cooling natural gas to minus 160C at normal atmospheric

pressure. One MT of LNG is equal to 1,400 cubic metres of natural gas at normal temperature and pressure

LNG Carriers : Double-hulled ships specially designed to carry LNG (primarily ethane and methane) under very low temperature

LPG : Liquefied petroleum gas, used for heating or as a fuel for vehicles

MODU : Mobile offshore drilling unit, a drilling rig used to drill offshore exploration and development wells that floats on the water surface when being moved from one drill site to another. Basic types of mobile units include bottom-supported drilling rigs and floating drilling rigs

modules : Modular sets of equipment designed to perform one or more functions and be installed on an offshore platform

mooring buoy : Offshore mooring system

MOPU : Mobile offshore production unit, a unit capable of floating that is used to perform offshore production. Basic types of mobile units include bottom-supported units and floating units

NOC : National oil company, oil and gas company owned by a national government, typically having special rights or access to its local market

OPEC : Organization of the Petroleum Exporting Countries, currently composed of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela

platform : Offshore structure that is permanently fixed to the seabed

PSC : Production sharing contract, an agreement between the parties to a well and a host country regarding the percentage of production, each party will receive after the participating parties have recovered a specified amount of costs and expenses

product tankers : Oil tankers equipped with appropriate machinery to handle volatile oil products such as petrol, kerosene and diesel oil

riser : Pipe or assembly of pipes used to transfer fluids from the seabed to surface facilities or to transfer injection fluids, control fluids, or lift gas from the surface facilities to the seabed. Risers can be either rigid or flexible

semi-submersible : Floating offshore system with pontoons and columns on which drilling or production facilities can be mounted. When flooded, the unit submerges to a predetermined depth. Semi-submersibles are either self-propelled or towed to the offshore site and are either anchored or dynamically positioned over the site or ballasted to rest on the seabed

shiplift : Structural platform that is connected to a number of winches and hoist systems to dock and un-dock vessels

skid-track : System using planks to make a track for rolling or sliding objects

SPAR : A vertical, cylindrical structure with the majority of the hull underwater. The deep hull of a spar lowers its centre of gravity, making the structure more stable. Also known as a deep draught caisson vessel

substructure : Structure that supports topsides and normally contains space for storage and well-control equipment

TLP : Tension leg platform, a TLP has a deck on a pontoon column structure moored to the seabed with steel tendons

topside : Oil production facility above the water, usually on a platform or production unit for drilling, production, accommodation or a mixture of these purposes

turret : Rotating structures used with the FPSOs to attach lines to the unit, allowing the lines to remained connected while the unit moves ; turrets may be internal or external to the FPSO

ULCC or ULCC vessels : Ultra-large crude oil carriers, crude oil tankers with a loading capacity above 300,000 dwt

VLCC or VLCC vessels : Very large crude oil carriers, crude oil tankers with a loading capacity between 200,000 dwt and 300,000 dwt

Source: Company


4 January 2011

Definition of Ratings

Maybank Investment Bank Research uses the following rating system:

BUY Total return is expected to be above 10% in the next 12 months

HOLD Total return is expected to be between -5% to 10% in the next 12 months

SELL Total return is expected to be below -5% in the next 12 months

Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.

Some common terms abbreviated in this report (where they appear): Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings BV = Book Value FV = Fair Value PEG = PE Ratio To Growth CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date EV = Enterprise Value PBT = Profit Before Tax

Disclaimer This report is for information purposes only and under no circumstances is it to be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.

The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Bhd and consequently no representation is made as to the accuracy or completeness of this report by Maybank Investment Bank Bhd and it should not be relied upon as such. Accordingly, no liability can be accepted for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Maybank Investment Bank Bhd, its affiliates and related companies and their officers, directors, associates, connected parties and/or employees may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.

This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. Maybank Investment Bank Bhd expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.

This report is prepared for the use of Maybank Investment Bank Bhd's clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of Maybank Investment Bank Bhd and Maybank Investment Bank Bhd accepts no liability whatsoever for the actions of third parties in this respect.

This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Published / Printed by

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Tel: (603) 2059 1888; Fax: (603) 2078 4194 Stockbroking Business:

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http://www.maybank-ib.com

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