sure, here you go~

@kimpau thumb up

kimpau bro, calm down please and avoid to respond to that guy will do... you may consider to delete your posts and let him be.....

hoot ptrans-wb before too late, rare golden chance 可遇不可求

engine warming up, good momentum

will be showing absolutely great 2022 Quarter 1 2022 Quarter 2 result, RM1 is just the timing only

is good for a counter to trade above RM1, let's see within how many months PTTRANS will be standing at that level

Date Open Price Target Price Upside/Downside Price Call Firm View
2022-02-23 0.61 1.16 +0.55 (90.16%)
TRADING BUY
PUBLIC BANK
2022-02-23 0.61 1.09 +0.48 (78.69%)
BUY
AmInvest
2021-11-17 0.705 1.16 +0.455 (64.54%)
TRADING BUY
PUBLIC BANK
2021-11-17 0.715 0.85 +0.135 (18.88%)
BUY
KENANGA
2021-11-17 0.715 1.09 +0.375 (52.45%)
BUY
AmInvest
2021-10-14 0.715 1.08 +0.365 (51.05%)
BUY
AmInvest

2022-04-28
Insider
DATIN SRI LIM SOW KENG (a substantial shareholder) acquired 730,000 shares on 28-Apr-2022.

2022-04-28
Insider
DATO' SRI CHEONG KONG FITT (a substantial shareholder) acquired 730,000 shares on 28-Apr-2022.

2022-04-28
Insider
DATO' SRI CHEONG KONG FITT (a company director) acquired 730,000 shares at 0.643 on 28-Apr-2022.

kimpau bro, you are always doing great. my average price 0.59, hope i can add more during "offer". btw, i hv strong position in rgtech

yes, absolutely a great recovery counter, and this coming quarter will be bombastic and let's flying to the moon together!

wahaha kimpau bro, this round you act faster than me

Dyson, VS, etc within these Senai industrial areas (EMCO)

Senai Industrial Area and indahpura start EMCO

but what kimpau shared is true, start from next Monday Senai Industrial Area cannot operate if not under essential industry. Thus will stop operate for about 1 month. Be cautious.

07-Jul-2021 Insider MR BEH CHERN WEI (a company director) disposed 120,000 shares at 1.366 on 07-Jul-2021.
07-Jul-2021 Insider MR BEH CHERN WEI (a company director) disposed 130,000 shares at 1.354 on 06-Jul-2021.
07-Jul-2021 Insider MR BEH CHERN WEI (a company director) disposed 150,000 shares at 1.357 on 05-Jul-2021.

stay tuned!!!

stay tuned!!! count down for fantastic news!!!

end of this month RM3.3+, stay tuned!!!

end of this month RM3.3+, stay tuned!!!

bought 2nd batch today! siok!

bought 1st batch too!! siok

good chance, grab!! stay tuned!

and one big announcement for new xxxx !!!

fantastic best ever result will be announced very very soon!!!

mid of March RM3.5x !!!

stay tuned!!!

https://www.thestar.com.my/business/business-news/2020/12/24/ems-players-set-to-gain

Serba Dinamik Holdings - Resilient earnings to continue
Date: 06/11/2020

Source : HLG
Stock : SERBADK Price Target : 2.50 | Price Call : BUY
Last Price : 1.53 | Upside/Downside : +0.97 (63.40%)

Back

We Participated in a Conference Call With the Management of Serba to Get An Update on the Company. We Opine That Serba Is Still Expected to Record Strong Earnings Despite the Volatility and Challenges in the O&G Industry. All of Its Expiring O&M Contracts Are Expected to be Renewed and the Company Believes That It Will be Able to Maintain Its Margins. While Job Tenders Have Slow Down, Tender Bids Remain Healthy at About 6-10 Tenders Per Month (as Compared to 12- 15 Per Month in FY19). FY21 Orderbook Growth Is Expected to be Underpinned by Its ICT Segment and the Teluk Ramunia Yard Is Expected to Improve Overall EPCC Margins. Maintain BUY, With TP of RM2.50 Based on 13.5x FY21EPS.

New job tenders are slowing down but tender bids remain healthy. Serba’s tender bids for O&M and EPCC jobs have slowed down from an average of 12-15 tenders in FY19 to about 6-10 tenders per month in 3Q20. The decrease in tenders is primarily attributable to lower global economic activity for the O&G segment due to Covid-19.

BiEH and PeIP. Serba has completed the construction of BiEH and is expected to begin operations in November 2020 while PeIP is close to completion and is expected to be ready by 1Q21.

Block 7 innovation hub and data centre project. The Company has finished the preliminary works for its RM7.7bn innovation hub project and physical construction works are expected to start by 1H21. Serba is currently doing the design works for its data centre project in UAE and preliminary works are expected to begin by 1H21.

Teluk Ramunia. Serba has completed handover of the yard from Petronas and have started internalizing some works which were previously subbed out to other contractors. It is also trying to lease out some land to other O&G players situated within a close proximity to the yard. However, extra works in Teluk Ramunia might not commence in 4Q20 due to the monsoon season. The lean structure of operations in Teluk Ramunia is expected to allow the yard to be profitable. Internalisation of previously subbed-out works is expected to add c.1-2% for its EPCC margins.

2021 orderbook growth is expected to be underpinned by its ICT segment. Serba believes that there is ample room to grow its ICT business as the Company expects to secure more contracts from Zambia and other parts of Africa.

No need for equity raising in the near future. Serba’s existing cash balance is sufficient to support its working capital requirements for the next 6-12 months. Serba also has RM2bn of unutilized debt facilities to drawdown if need be.

Outlook. We believe that prospective job wins for Serba is expected to slow down in 2021 due to current economic activity. However, the trend of renewals for existing O&M contracts are still happening and we expect its O&M margins to be maintained going forward as there have been no contract renegotiations thus far. Its orderbook backlog of RM18.5bn would also be able to sustain its earnings growth in the next 2 years as the burn rate for the Block 7 and innovation hub contract is only expected to peak in FY22. Its Teluk Ramunia yard is also expected to improve its overall operational performance and margins as it would be able to internalize more contracts that were previously subbed out. It can also tender for more projects with its new yard in place.

Forecast. No Changes.

Maintain BUY at TP of RM2.50 based on 13.5x FY21 EPS. We maintain our BUY call on Serba as we believe that (i) the recent weakness in its share price presents a very good opportunity to buy into the stock as our TP implies an upside potential of almost 70%, (ii) Serba would be able to maintain its high EBIT margins for its O&M division, (iii) the recurring nature of its O&M orderbook would ensure earnings sustainability in the foreseeable future despite lower prospective contract wins in FY21 and (iv) earnings are expected to grow exponentially in FY22 when its Block 7 project hits its peak earnings phase.

Source: Hong Leong Investment Bank Research - 6 Nov 2020

Serba Dinamik among Fitch Ratings’ top 50 Asian high-yield corporate issuers
Surin Murugiah
/
theedgemarkets.com

October 08, 2020 11:16 am +08


-A+A
KUALA LUMPUR (Oct 8): Serba Dinamik Holdings Bhd has been named in a peer group of the top 50 Asian high-yield corporate issuers (Asia Corporate HY50) by Fitch Ratings.

In a report released yesterday, Fitch said the Asian high-yield market had been expanding continuously over the last decade, and is now a distinct asset class in its own right. High-yield issuers (as defined by JPMorgan's composite rating) in the JPMorgan Asia Credit Index (JACI) already account for 17% of the market capitalisation of the index — and 23% if unrated names are included.

Commenting on Serba Dinamik, Fitch said the rating reflects its strong market position in Malaysia, where it was the fourth-largest oil and gas service and equipment company by revenue in 2017.

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It said the rating is also supported by Serba Dinamik's solid financial profile, short- to medium-term revenue visibility and low earnings cyclicality.

Fitch said the company's smaller operating scale as well as limited product and end-market diversification relative to other higher-rated peers constrain its rating.

Key rating drivers
Fitch said Serba Dinamik had an established reputation for project completion.

Its order book grew by more than eightfold in the five years to 2018 and reached around RM10 billion by the third quarter of 2019 (3Q19).

“The company's order book/revenue ratio was about 2.5 times at end-September 2019, and Fitch expects it to be at 1.5 times to two times in the medium term, providing revenue visibility.

“We also believe Serba Dinamik is well positioned to benefit from vendor consolidation and rising capex (capital expenditure) in the downstream segment by Malaysian national oil company Petroliam Nasional Bhd (Petronas),” it said.

Fitch also believes Serba Dinamik's rating is constrained by the need for capex to support its growth, which limits its ability to generate a neutral to positive free cash flow.

“Nevertheless, this is partly compensated by the company's focus on mid-tier clients, which supports its bargaining power and has translated into industry-leading profit margins,” it said.

On substitution risks, Fitch said Serba Dinamik's operations and maintenance (O&M) contracts, which account for the majority of its revenue, are typically non-exclusive.

It said this exposes the company to the risk that it may be substituted by competitors, especially those from outside Malaysia.

“Nevertheless, Fitch believes the risk is mitigated by the operating licences Serba Dinamik holds in different jurisdictions, its long-term relationships with clients, and its track record and reputation in the industry.

“We also believe substitution risks are likely to decline as the company diversifies its customers and end-markets.

“Serba Dinamik's revenue concentration in Malaysia fell to 29% from 55% between 2013 and 9M19 (the cumulative first nine months of 2019), and its exposure to the oil and gas sector to 83% from 87%,” it said.

On revenue visibility, Fitch said Serba Dinamik typically enters into two- to five-year contracts for its O&M services, and 1.5- to three-year contracts for engineering, procurement, construction and commissioning (EPCC) projects, which provides some revenue visibility.

“Serba Dinamik's maintenance services, which tend to have more resilient demand during industry downturns, partly offset its exposure to the cyclical oil and gas sector, where lower prices lead to curtailment of activities and spending.

“Over 60% of Serba Dinamik's order book is from the downstream oil and gas segment, which makes its cash flow less sensitive to the exploration business and, subsequently, to commodity price fluctuations,” it said.

Fitch said it expects Serba Dinamik's leverage, after adjusting for key financials of associates to which Serba Dinamik provides proportionate financial guarantees, to increase to around 2.7 times by end-2020 (end-2018: 1.9 times) on higher working capital needs to fulfil new orders.

At 10.43am today, Serba Dinamik was flat at RM1.61, with a market capitalisation of RM5.46 billion.

28/09/2020 1.67 2.41 +0.74 (44.31%) BUY MalaccaSecurities
14/09/2020 1.70 2.50 +0.80 (47.06%) BUY HLG
26/08/2020 1.76 2.45 +0.69 (39.20%) BUY PUBLIC BANK
26/08/2020 1.76 2.70 +0.94 (53.41%) BUY KENANGA

stay tuned!!!

Serba Dinamik Holdings Berhad - Stepping Up The ICT Space
Date: 28/09/2020

Source: MalaccaSecurities
Stock: SERBADK
Price Target: 2.41
Price Call: BUY
Last Price: 1.66
Upside/Downside: +0.75 (45.18%)

Summary
Serba Dinamik Holdings Bhd (Serba Dinamik) and Huawei Technologies (M) Sdn Bhd have formed a partnership to drive digital transformation in urban and rural Malaysia. Both signed a memorandum of understanding (MOU) which marks the start of the partnership to develop digital solutions via the adoption of Huawei Cloud and Artificial Intelligence (AI) technology.

The MOU aims to bring about digital transformation of the oil and gas industry, innovative IT solutions on cloud and to reach the unreached by digitally enabling those in rural areas, as well as to look into setting up smart industry areas in Sarawak and Johor. The partnership aims to build smart campuses and a digital industry in Malaysia. The digital industry will include a platform for education, smart living ecosystem and automation for manufacturing, according to the companies.

We view the collaboration as a positive move for Serba Dinamik with the opportunity tap into Huawei Technologies technical capabilities in the technology space. In the meantime, the move is also in line with the country focus to encourage the adoption of digitalisation under the 4th Industrial Revolution (IR 4.0). The move is time as the Covid-19 pandemic has proven that digitalisation and automation is a necessity to ensure business sustainability.

Serba Dinamik also aims to build their ICT business as part of their business strategy to reduce the reliance on the oil & gas (O&G) business segment. With the oil & gas business currently making up to >90.0% of total revenue, Serba Dinamik aims to gradually reduce revenue contribution from the O&G segment ~50% of total revenue over the next 3 years.

Digital transformation will be earnings accretive for Serba Dinamik in the long run, premised to the rising demand for businesses across various sectors aiming to improve operations efficiency. Meanwhile, we expect the extended downturn in oil & gas sector to remain unsettled over a longer term period despite relevant parties’ efforts to bridge the supply-demand imbalances.

Valuation & Recommendation

We made no changes to our earnings forecast as we deem that the potential collaboration is still at infant stage and has yet to contribute to Serba Dinamik’s earnings. Consequently we maintain our BUY recommendation on Serba Dinamik with an unchanged target price RM2.41. Our target price is derived by ascribing an unchanged target PER of 13.0x to its revised FY21f EPS of 18.5 sen.
We continue to like Serba Dinamik as one of the key players in the oil & gas industry, backed by its sturdy orderbook comprising of dozens of jobs from local and overseas that will provide long-term earnings visibility, coupled with the group’s on going effort diversification into businesses that generates recurring income.

Risks to our recommendation include failure to hit the targeted outstanding orderbook of RM16.20bn by end-FY20. Meanwhile, a firmer ringgit against the USD could affect the group’s bottom line as it will have a negative impact on the group’s earnings and vice versa with majority of existing orderbook derived from overseas.

Source: Mplus Research - 28 Sept 2020

Serba Dinamik to diversify into technology
Saturday, 26 Sep 2020

Karim Abdullah (seated left) and Vice-President Cloud Huawei Malaysia, Lim Chee Siong (seated right) signing the documents. Chairman of Serba Dinamik Abdul Kadier Sahib (standing left) and CEO Huawei Malaysia, Michael Yuan (standing right) watching the signing. - Bernama

KUALA LUMPUR: Serba Dinamik Holdings Bhd aims to reduce the company’s dependency on oil and gas (O&G) revenue by 40%-45% by 2022.

Chief executive officer Datuk Mohd Abdul Karim Abdullah said the energy services group targets to reduce its O&G revenue to 75% from 85% last year.

“The company’s diversification would primarily focus on the technology-related segment.

“This is to strengthen the company’s financial position, ” he said after signing a memorandum of understanding (MoU) with Huawei Technologies (Malaysia) Sdn Bhd yesterday.

As for non-O&G, the company targets a revenue contribution of up to 55% in two years, said Abdul Karim.

The company intends to raise technology revenue to 7% or RM350mil this year and double the revenue contribution in 2021, he added.

Meanwhile, the collaboration with Huawei would boost Serba Dinamik’s digital transformation in the O&G industry, said Abdul Karim. “This will bring digital transformation not only for the O&G sector but also allow us to embark on innovative cloud-based solutions.

“This partnership also includes setting up smart industry areas in Sarawak and Johor, ” he said.

Huawei Malaysia CEO Michael Yuan said the tech company would be providing 5G technology, cloud services, and artificial intelligence (AI) technology to realise Serba Dinamik’s digital transformation. – Bernama

14/09/2020 Target Price 2.50 +0.80 (47.06%) BUY HLG
26/08/2020 Target Price 2.45 +0.69 (39.20%) BUY PUBLIC BANK
26/08/2020 Target Price 2.41 +0.65 (36.93%) BUY MalaccaSecurities
26/08/2020 Target Price 2.70 +0.94 (53.41%) BUY KENANGA

Inter-Pacific starts coverage on Serba Dinamik with 'buy' call
Chong Jin Hun

theedgemarkets.com

September 21, 2020 17:32 pm +08

KUALA LUMPUR (Sept 21): Inter-Pacific Research Sdn Bhd said today it initiated coverage on Serba Dinamik Holdings Bhd shares with a "buy" recommendation and target price of RM2.72 after taking into account the energy services group's resilient earnings and continued growth.

In a note today, Inter-Pacific analyst Daryl Law Shih Shion said Serba Dinamik's forward earnings are expected to be driven by strong engineering, procurement, construction and commissioning segment's contributions from recently awarded projects, barring any development delays.

"Serba Dinamik is undervalued at this juncture, given its strong consistent performance, aggressive order-book growth (company internal target of 20% year-on-year growth), and in comparison [with] its closest peer, Dialog Group Bhd, that is trading at approximately 30x PER (price-earnings ratio), in our view," Law said.

"We give Serba Dinamik a 'buy' with a target price of RM2.72, a potential upside of 58%. We derive our target price from ascribing a target PER of 13x to our CY21F EPS estimate of 20.9 sen, implying a 12% y-o-y earnings growth from our CY20F estimate of 18.2 sen," he said.

According to Law, the potential upside of 58% is based on Serba Dinamik's previous closing share price of RM1.72. At that price, he said Serba Dinamik is valued at a PER of 10.7 times versus a simple industry average of 18.3 times.

He said the simple industry average includes valuation of companies like Dialog and Sapura Energy Bhd.

Law said Inter-Pacific likes Serba Dinamik for its strong market position, diverse geographic presence and stable revenue from maintenance projects.

Key downside risks for Serba Dinamik include slower orderbook replenishment and growth, he said.

On Bursa Malaysia today, Serba Dinamik's share price closed down five sen or 2.91% at RM1.67 for a market value of RM5.63 billion.

The stock saw 3.58 million shares traded.

SERBA DINAMIK~ 随心聊聊 （brief comment on SERBA DINAMIK）
Author: nonspeculator | Publish date: Sun, 13 Sep 2020, 7:31 PM

My blogger: https://www.sustainableinvestment22.ml/2020/09/serba-dinamik-brief-comment-on-serba.html

希望大家喜欢我的分享。欢迎大家留言。记得把‘ALLOW’大大力的按下去；以后有新的文章发布我都会send push notification 给你们，这样你们就能第一时间看到我的文章了

今天带大家来看看油气股里的稳定派——SERBA DINAMIK。说到稳定的油气股大家都把SERBA DINAMIK 和 DIALOG 联想在一起。从疫情爆发以来两家的业绩都还算稳定成长，但论长期能否在疫情期间能否保持成长势头还要再观察。SERBADK Q2 FY20 只区区成长了10%，那是因为融资成本增多（公司去年发行了RM1.2Bil的bond 今年也发了RM300mil 的bond）和associate 由盈转亏（影响变大）的关系。大家对他的第一印象估计是新合约不断，掌舵人是一位能力不凡的土著企业家。可谓为土著长脸了。毕竟千家马股里土著掌权的公司为数不多，更何况是基本面好的公司。土著占人口比例60% 土著掌权的公司却寥寥可数，其原因究竟为何？SERBADK 能把业务做到世界各地，个人好生佩服。

为何稳定？第一SERBADK 的主要营业额原自operating and maintenance （O&M. 这生意是带有recurring basic 的。这意味着在油市低迷时依然有得做，因为只要油企继续产油就需要为设备做维修。掌舵人在年初接受报道时称就算在2014-2015油价暴跌时合约价值只微微下调了10%。在2014-2017年间依然保持成长是最佳的证明。当然能成长是公司积极拓展业务所致，但也因为现有的业务没有拖后腿才能成长。

论SERBADK 的竞争力。SERBADK一直有在做收购。这收购的目的就是把别人的技术和顾客联络网都纳入自己麾下。在2018年， SERBADK 一连串收购了 eNOAH， AL-SAGAR， SREEM turbine.这eNOAH 的业务就像bursa里的OMESTI的业务差不多 （cloud computing）.而AL-SAGAR 是活跃于中东的工程公司。收购AL-SAGAR是为了打入中东市场。SREEM turbine 是 turbine 的manufacturer。个人估计是为了提升自己在turbine的技术，毕竟rotating equipment 的MRO 是他的主要业务。此外，SERBADK与MICROSOFT合作以microsoft AZURE和 Microsoft hololens为基础开发的plant turnaround solutions。简单来说就是用IOT 来实时监控工厂设备并用hololens为工程师提供维修的指引。今年收购的WELLAHEAD （UK firm）相信是用来增强零件仿制业务和进入North sea业务。关于serbadk 的零件仿制业务https://www.facebook.com/watch/live/?v=199904607809734&ref=watch_permalink 。

现在我们就来看看SERBADK 的其他业务。EPCC业务 在Q2 FY20贡献10%的revenue。EPCC 有别一般的建筑合约。EPCC 除了建筑活动也包括提供设计，工程解决方案 。SERDADK今年获得了两项于UAE EPCC合约。这两项合约都与ICT相关。第一项是科技园区的EPCC 总值RM7bil。第二项则是同样位于UAE的Data center EPCC RM总值1.4bil。这些合约给予SERBADK 在system integration 上学习和展现能力的机会。ICT 业务可算是异军突起了。这个segment 的营业额，盈利可是以几百%的速度在成长。以前SERBA DINAMIK ICT 都是为其他业务做complementary的，但是现在看来假以时日可以独当大旗。现阶段ICT 业务的增长可能是因为属于O&M增长所致，因为ICT 已成为SERBADK 赢取其他合约主要竞争力，不过今年一月和六月公布的合约中有ICT专属的项目。公司也有education&training 业务。以前主要是提供机械设备维修的课程为主，今年serba dinamik收购了UNIMY 大学，虽然不是什么名校，但是这间大学是以ICT课程为主的大学，相信对扩充他的ICT 团队有帮助。

展望未来，我觉得现有的>RM18 bil order book 来看未来两三年保持成长是有着落的。这RM18 bil 的合约还没包括那些 on call out basic 的合约ohh。等待公司在pengerang 的facility建设完毕；到时公司能cater 的volume 更多，就能更积极的去竞标合约。在六月份公布的合约中显示公司已获得PENGERANG RAPID 化工厂的长期合约。除了PETRONAS 的合约，这rotating equipment 的MRO 潜在的客户对象有火力发电厂，水力发电和泵相关的设备。Pengerang 位于出海口来自外国的设备也容易卸装。别小看新加波这个弹丸小国噢，以产量而言，新加波石油化工在东南亚是排行第一的。到时候来自中东，新加波，的设备都会源源不绝的送来这里做MRO 。（我自己的猜想啦）哈哈

美中不足的是公司现在债务是偏高的，但是应对短期的working capital是足够的。至于股价估计依然会受油价波动影响。但是股价受油价波动影响是因为大家对他的展望抱有不确定性，但是RM18Bil合约提供了未来两三年的确定性。以这样的逻辑延申现在的股价是被低估的，但是前提是经济大国没因疫情而再次lock down。现在我个人的操作是保持大约50% 的现金用每个月的free cash 慢慢买。除非出现让我孤掷一注的机会否则不会大手买入。SERBADK 这家公司2018中 开始开始买入，现在平均价介于RM1.65左右，大致是买够了，剩下的就一点一点买咯，毕竟这种世代keep cash 方位上策。

希望大家喜欢我的分享。欢迎大家留言。记得把‘ALLOW’大大力的按下去；以后有新的文章发布我都会send push notification 给你们，这样你们就不会错过我的文章了

you might be interested SERBA DINAMIK -展望依旧良好 prospects remain bright

Disclaimer：个人是持有这个公司，但并无左右股价之意；这也并非买卖建议；所谓读书不能尽信书，千万不要看了我的文章就去做买卖哦；我要卖的时候也不会告诉大家。我写这文章的用意是想用鉴赏的方式让大家认识好的企业好的管理层。

Serba Dinamik Holdings - Morphing Into a Giant Conglomerate
Author: HLInvest | Publish date: Mon, 14 Sep 2020, 10:40 AM

We initiate coverage on Serba as it is one of the few O&G related stocks that is relatively insulated from the volatility in oil prices with strong earnings track record. Serba has experienced a steep decline in its share price when oil prices plunged in March and we opine that valuations are still undemanding at this juncture. The Company has proven that it can maintain its overall EBIT margins for its O&M division (c.20%) despite the challenges it faced during the MCO. Its current oderbook of RM18.5bn (+85% YoY) is mainly underpinned by its RM7.7bn innovation hub contract (EPCC) win from Block 7 LLC (LIWA Petroleum) in UAE. Its current EPCC orderbook to revenue cover is at 14x, while its O&M contracts are mostly recurring in nature. While most oil majors have continued with its capex cuts, Serba has been able to secure new contracts of material value, a testament towards its ability to become a giant conglomerate with exposures across O&G and IT. We initiate coverage on Serba with a BUY call at TP of RM2.50 based on 13.5x (3 year mean P/E) FY21 EPS.

Strong growth and earnings sustainability underpinned by sizable orderbook.
We expect Serba to experience revenue CAGR of 37% from FY20-22F due to its large orderbook backlog. Of its RM18.5bn orderbook, 40% of it is from its O&M division, which are recurring in nature, commanding an EBIT margin of about c.20%, while its EPCC contracts are mainly attributable to its RM7.7bn UAE contract. The bulk of its EPCC contract earnings are expected to peak in FY22.

Strong presence in Middle East. We believe that Serba’s strong presence in the region would bode well for them as it has a proven track record and close relationship with many of its counterparts. Its RM7.7bn EPCC contract in UAE is a testament towards its ability to secure material contracts in the aforesaid region. It also commands an attractive EBIT margin of about c.20% in the Middle East for its O&M business. About c.60-70% of its O&M contracts comes from the Middle East.

Sarawak play. We view that Serba’s stature as a “Sarawak company” would open up more opportunities for them. Recall that most MCM/HUC/Plant turnaround contracts were predominantly awarded to Sarawak based companies, and this trend is expected continue when Petronas decides to elevate its capex spending.

Forecast. We forecast FY20 core earnings to come in at RM556.6m (+12% YoY), a very commendable return in spite of the volatile and weak O&G market. We believe that Serba’s earnings would peak in FY22 when its Block 7 contract goes through its peak earnings phase in FY22. We forecast profit to grow by c.12/12/28% for FY19- 22F, implying a 3-year CAGR of 17.1%

Dividend. We expect Serba to stick to its dividend policy of paying out at least 25% of its net earnings yearly. This would imply a current yield of 2.7/3.0/3.9% for FY20-22F.

Risks. Downside risk to our forecast include (i) shortfall in meeting orderbook replenishment targets, (ii) intense competition from other players with similar business models, (iii) weaker than expected economic environment dampening demand thereby causing margin erosion and (iv) continued downturn in the O&G sector.

Initiate with a BUY, TP: RM2.50. Our TP is based on FY21 EPS of 18.4sen pegged to a PE multiple of 13.5x, which is its 3 year mean P/E. Our TP implies an upside potential of almost 50% including dividends, we believe this is justified as it is likely that Serba would be able to maintain its high margins amidst the weak O&G market. Serba currently has the highest EBIT margins for O&M in Malaysia and the recurring nature of its O&M contracts and rapidly growing EPCC orderbook would ensure earnings sustainability in the foreseeable future.

Source: Hong Leong Investment Bank Research - 14 Sept 2020

stay tuned!!!

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stay tuned!!!

@uncletanahchoi will be heading to 0.5x, probably by year end or next year 1st Q

very very soon will announce!!!

stay tuned!!!

stay tuned!!!

bravo!!!

lsg10 bro, serbadk wa 0.68 no problem also