Good morning.
Today, we feature a note on Serba Dinamik Holdings Berhad in our FundTech Radar – 10th July 2018. Serba’s business activities comprise of O&M and EPCC. It is an energy group providing engineering solutions to the oil & gas and power generation industries with operational facilities in Malaysia, Indonesia, UAE, Bahrain and the UK.
Fundamental Stance
· A strong 3-year (FYE15-17) revenues and core PATAMI CAGR of 53.3% and 69% respectively.
· A stable core PATAMI margin of about 10.6% on 4-year historical average.
· Net gearing ratio dropped to 0.03x as at 31 Mar 18 (vs. 0.25x in 4Q17).
· Since its listing in Feb 17, it paid div. of 6.8 sen per share in FY17, with a div. payout of 32.4%. YTD, it paid 1.9 sen per share in FY18.
· Since its listing, KWAP and EPF surfaced as substantial shareholders of SERBA. Both have increased their stake in SERBA by 2.25% and 1.94% respectively in the past 3 months.
· Current outstanding orderbook of approximately RM6.6bn, which provides two-year earnings visibility.
· Serba is expecting to hit a target order book of RM7.5bn by year end. It has a 20-30% success rate of its global tenderbook of RM13bn.
· The recent acquisition of a 24.8% stake in SGX-listed CSE Global in April could potentially expand its geographical footprint.
· The largest substantial shareholder in SERBA, Dato’ Karim, is also a Deputy Chairman of CSE Global Ltd.
· About to commence earthworks in July for the MRO zone in Pengerang Eco Industrial Park (PEIP).
· According to Bloomberg, there are 7 buy calls with a consensus target price of RM4.31.
Technical Front
Trend is up.
Resistances: 3.64/4.00/4.26
Supports: 3.06/2.94/2.57
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
10th Jul 2018
Disclaimers: This distribution is by CIMB Investment Bank Berhad (“CIMB”) in Malaysia only. The views are our own as of this date and subject to change. No further distribution is allowed without our prior written consent. CIMB, its related corporations, affiliates and business partners make no recommendation, offer or invitation to transact in any securities, futures contracts or other instruments. Please make your independent evaluation, consider your own investment objectives and financial situation and consult your own professional advisers before participating in any transaction.
