Destini expected to get new MRO jobs from KTM in 2018

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Destini Bhd(Jan 9, 65 sen)Initiate buy with a target price (TP) of 74 sen: Destini Bhd group managing director Datuk Rozabil @ Rozamujib Abdul Rahman took over the financially troubled Satang Holdings Bhd in September 2011, restructured the company and renamed it Destini Bhd. He transformed the group from a mere survival and safety maintenance, repair and overhaul (MRO) service provider into a regional integrated engineering solutions provider with businesses in the marine shipbuilding, aviation, land transport, and the oil and gas industries. Destini, listed on the Main Board, is a syariah-compliant stock.

Managements long-term strategy is to grow Destinis MRO asset base as it aspires to be a regional engineering MRO service provider. Currently, its main MRO business is providing safety and survival equipment MRO services to the Royal Malaysian Air Force, but there is potential to expand its MRO services to paramilitary ships and helicopters, and the Malaysian Railway (KTM) in our view.

Destini currently generates more than 80% of its revenue from the marine and aviation sectors. Its main marine revenue contributor is the construction of New Generation Patrol Craft and Offshore Patrol Vessels for the Marine Maritime Enforcement Agency, to be delivered by 2018 and 2020 respectively. We expect Destini to bid for the MRO of these vessels upon the completion of their construction.....

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