Posted by Choivo Capital > 2020-09-02 17:41 | Report Abuse

Interesting

Posted by Sslee > 2020-09-02 19:11 | Report Abuse

The O&M is proven but EPC contract of RM7.71b and RM1.47b in Abu Dhabi??

Posted by Philip ( buy what you understand) > 2020-09-02 23:20 | Report Abuse

Like I said, note the date and the the other IR engineer Saleh who is founder of liwa investments. Ask those big Abu Dhabi jobs come from him. This is what Karim said during analyst meeting:




The whole answer came like this:

It will be progress payment (never specify from who), which will be certified and accepted by the contract awarder. Who is the owner of Block 7 now? At the moment, the owner is one of the royal family in UAE. He is one of the mastermind behind the establishment of ADNOC and he is also a very active entrepreneur. We are also having a strong conversation with a few international financiers. HSBC has a very strong presence in UAE, Standard Chartered too and some local banks. Of course, the culture of UAE is in the sense that any project will be much stronger if the government of Abu Dhabi can come in and become a stakeholder in the project. Fortunately, we have got good news that the indication of such a situation to happen is highly possible. With that, we say it gives us a stronger assurance. To be honest, we feel the same as the analyst in the sense that the financing part stresses us a lot but this development gave us a more peaceful mind.

The next thing analysts always ask us is if Serbadk will share asset ownership in this project. The offer has been given to Serbadk to take up stake in the Abu Dhabi project. To the best of what we believe at the moment, there is a possibility but we want to emphasize that it falls under asset ownership model and it has never been the business intention of Serba to own a very high percentage of asset. We will just own a minimal percentage necessary to assist Serbadk in expanding its connection and relationship with prospects and future job that will come from that kind of arrangement. If the government of Abu Dhabi comes in, it will change the entire landscape of the project. This development is quite positive we received overnight based on documentary evidence we received yesterday.




Serba management is very confident that the government of Abu Dhabi will come in with a position in the project as it is very unique and adds long term value to the country itself which adds many previously had to be imported.

Take it as your will. Instead of investing based on past results, investing based on future returns will instead yield better results over time.

Posted by Sslee > 2020-09-03 08:55 | Report Abuse

Good morning Philip,
Mind to answer below questions?
https://www.theedgemarkets.com/article/serba-dinamik-looks-ict-future-where-oil-no-longer-main-energy-source
July 22, 2020 14:00 pm +08

The project’s investor is Efire Capital Holdings Ltd, says Karim. A look at Efire’s website shows that the investment holding company in which Emiratis Salah Salem Omair Al Shamsi and Hadef Al Shamsi, and Karim himself are partners.
Question: Anyone know Karim ownership % in Efire Capital Holding Ltd.

“At the moment, we are finalising the pre-architecture with Gensler — one of top 10 architecture firms based in London. Soil investigation and traffic study are currently ongoing.
“Once the architectural design has been firmed up and accepted by Efire, we will start the ground work. We can put in the first invoice to Efire by end-August. Construction will start in the first quarter of 2021,” says Karim.
Question: So how to award the EPC contract when architecture design is not yet completed?

However, the group has a high net gearing ratio of 0.8 times as at March 31, 2020.
On its net gearing ratio, Karim says the group is monitoring the level every day. This is because it has sukuk and bank loans that require the ratio to not exceed the allowable threshold of one time.
“Sure, our borrowings have increased, but our earnings are increasing as well. So we are trying to [find a balance] between our debt and equity levels. One way to raise the equity portion is through private placement.
“Next year is a possibility (for private placement), but the shareholders should not be concerned because this is to fuel our business growth,” he adds
Question: So 2021 another round of cash call PP with 10% price discount. Is it better to sell the warrants and buy mother shares to at least get the dividend every quarter?

Besides the innovation hub, other non-O&G EPCC contracts that Serba Dinamik has won include those for a chlorine processing plant in Uzbekistan worth US$250 million, a chlor-alkali processing plant in Tanzania worth US$110 million and a hydropower plant in Laos valued at US$150 million.
Question: Do Serbadk own processing patent to offer processing plant?

Posted by Devilsadvocatee > 2020-09-03 12:26 | Report Abuse

Nice to hear your thoughts Philips. High risk, high reward i guess. Hope this turns out well for you.

Posted by greedy44444 > 2020-09-03 12:56 | Report Abuse

This stock too boring just like many other good stocks... more like long term fixed deposit in the bank.

Posted by Philip ( buy what you understand) > 2020-09-03 20:58 | Report Abuse

Hi sslee,

Let's try to answer your questions one by one.

1. Instead of asking karims share, instead we look to the purpose. In middle East just like in Malaysia, Indonesia and Brunei foreign companies cannot get jobs directly without a local partner share. As it is impossible to give 60% share of serbadk to a middle East partner to get the job, it is a necessary method to get projects going. Karims portion is just a necessary requirement to ensure that the project goes in and signed off by serbadk director. It would the exact same way if Facebook were to try to open business in Brunei.

2. The requirement is similar to design and build projects. In this case it is more similar to a development project. I put a budget out, pre-bid designs come out based on lump sum of what facilities I need, how many room etc, the costing is based on price per sqft and QS estimates. I must admit, this is very different to what I am used to, but I was told in middle East things are done differently. Execution risk abounds, but as the architecture design is also done by serbadk based on the price given, I think the reward is worth the risk.

3. It depends on your point of view. I have both. If you need cash, then dividends are important to you. For me, I care more about the structure of the business and it's prospects, because if it works I will benefit either way. If it doesn't, it doesn't really matter how much dividend you get if the share price goes to zero.

4. You can check serbadk on the products it now carries under its umbrella and distributor of. As for patent, I do not believe they have it, but it is not their core requirement, they just need to know how to operate and maintain. More importantly, as part of their exercise they also bought ownership a small part of the plant, making them owners of the earnings generated in the future. This is their asset sharing model, which is designed so they have a connection to the owners and allows them to get more o&m contract in the future.

Posted by blood7 loves kavalan solist > 2020-09-04 00:28 | Report Abuse

hmm interesting.... btw, so is there gonna be a part 2 where you gonna write about Kpower & SCIB? i am waiting with bated breath...... u see, i read from somewhere you invested following tips from a disqualified accountant/retired fishing uncle (no offence to him, if any, i apologize in advance:p) and i hope that's not true.... is it? :)

Posted by Philip ( buy what you understand) > 2020-09-04 06:23 | Report Abuse

You are welcome to join my telegram discussion group to meet said uncle and apologize to him in advance. And anyone who knows me knows it's silly to follow.. tips. I used to do that back in the 90s and lost my pants. These days I prefer to research and monitor a stock for 1-2 years before I make a decision.

The fishing uncle did propose, but he sold the stock at 2.5 - 3. While, I am still holding on. We just happened to buy the same stock, except I have far larger position.

You keep apologizing in advance. Stop doing that. If you know it's going to be a troll remark, then just don't do it.

Posted by Sslee > 2020-09-04 09:00 | Report Abuse

Good morning Blood7,
Should have listen to qqq3 and bought SCIB and Kpower?

https://klse.i3investor.com/blogs/qqq33333333/2020-03-02-story-h1484661136-SCIB_and_Kpower.jsp
This SCIB and Kpower..............no need to read Balance Sheet, no need to do KC Chong kind of ROCE calculations. Just bet on Malaysia's Elon Musk...............no need accountants to advise you

Posted by Wisdom for Freedom > 2020-10-19 23:01 | Report Abuse

Thanks for the good insight. I agree on the qualitative aspect which no doubt the leader of the company has vision and clearly knows what he is doing and where he is bringing the company to.

But I was looking for an answer on your #2 question on growing revenue along with increasing late receivables but to no avail. This is something i would worry about especially in this cloudy oil future due to the pandemic. There is a claim that the longer payment term is a trade-off of higher profit margin, but comparing with its closest peer Dialog, the margin doesn't look better. In addition, we all know obviously the debt is huge, which many may argue that this is necessary for future expansion and growth. The problem is, a closer look found the net operating cash is at the low side (18%-32%) of the net profit consistently for the past 4 years (with public disclosure), and operating cashflow is constantly lower than investing cashflow but still giving out dividend every year, i see the debt (inflow from Finance activity) will become more and more huge until a point it's not sustainable, if he failed to do anything to mitigate the risk, like improving receivables, or reducing dividend(no one likes).

Yes, low share price doesn't mean the company is bad, but there must be something the investors don't like about. In this case I'm one of the interested investors but concerned about the quantitative aspect. This perhaps justifies the low PE comparing to its peer. but i stand to be corrected.

Posted by AllWin > 2021-06-29 21:00 | Report Abuse

Philip, what is your thought on currrent Serbadk situation ?

Posted by whkwoon > 2022-01-31 13:32 | Report Abuse

Gone with the wind