The $20m property sale and leaseback was a key transaction in 1H20, positioning MCE to take advantage of potential growth opportunities should they eventuate. A second 6 monthly period of positive EBITDA was also noteworthy. However, the order book of $10m is yet to reflect the improving macro in offshore oil & gas, and until it does so, the lack of visibility makes forecasting and valuation difficult. MCE looks cheap on our FY21 forecasts, but we need some evidence these are achievable before upgrading from HOLD.
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