News

AmInvestment Bank maintains "buy" call on Serba Dinamik



KUALA LUMPUR, Feb 11 -- AmInvestment Bhd has maintained its ‘buy’ call on  Serba Dinamik  Holdings Bhd (Serba) with an unchanged forecast and dilutes sum-of-parts-based fair value of RM3 per share.

In a research note today, it said, this followed Serba’s confirmation that it is in preliminary negotiations with the Sarawak state government to acquire Sarawak-based Brooke Dockyard and Engineering Works Corp.

“While such an acquisition could strategically transform Serba’s offshore fabrication and operation and maintenance capabilities, we would have been negative on such a development given the potentially high price tag, which channel checks had indicated was at RM150 million.

“Additionally, as Brooke Dockyard was reportedly in financial distress with losses incurred on a contract, we are doubtful that the company is able to secure any major contracts over the near to medium term from Petronas, which requires good and timely execution from its contractors,” the research house said.

AmInvestment’s analyst Alex Goh said Serba’s high net gearing of 0.7 times in the third quarter of 2019 is likely to rise further to 0.8 times by the fourth quarter of 2019 due to working capital requirements.

Hence, the group is likely to raise additional equity to finance such an acquisition, he said.

“Given that the yard is unlikely to generate any substantial profitability over the next one to two years, on the lack of outstanding order book, an acquisition by Serba would have been value-destructive.

“As such, a possibility has been averted, we remain optimistic of Serba’s earnings growth prospects, with an outstanding order book that is already reaching RM10 billion currently and the management is still aiming for topline and earnings growth of 10-15 per cent for the financial year of 2020, supported by an ambitious order book target of RM15 billion,” he added.

-- BERNAMA

 

 





    Other News

Serba Dinamik secures RM1.47 bln ICT project in Abu Dhabi

KUALA LUMPUR, Aug 6 -- Serba Dinamik Holdings Bhd's wholly-owned subsidiary, Serba Dinamik International Ltd (SDIL), has received and accepted a letter of award from Future Digital Data Systems LLC (FDDS) to undertake the engineering, procurement, construction and completion of a data centre and its related facilities, infrastructure, and landscaping in the United Arab Emirates (UAE).


Petronas withdraws appeal against High Court dismissal of judicial review over imposition of SST

PUTRAJAYA, Aug 3  -- Petroliam Nasional Berhad (Petronas) today withdrew its appeal against the Kuching High Court's ruling that Sarawak is entitled to collect sales tax on petroleum products.


UCT to set up manufacturing facility in Batu Kawan

KUALA LUMPUR, July 30 -- Ultra Clean Holdings Inc (UCT), a US NASDAQ-listed developer and supplier of critical subsystems, ultrahigh purity cleaning and analytical services primarily for the semiconductor industry, will be setting up a 300,000 square foot manufacturing facility in the Batu Kawan Industrial Park, Penang.


    Main Sponsor


    Quotes



© 2020 BERNAMA. All Rights Reserved. Disclaimer | Privacy Policy | Security Policy This material may not be published, broadcast,
rewritten or redistributed in any form except with the prior written permission of BERNAMA.

Best viewed in Firefox 58.0.1 (64-bit) & Chrome Version 63.0.3239.132 (Official Build) (64-bit) with 1920 x 1080 resolution

Contact us :
General [ +603-2693 9933, helpdesk@bernama.com ]
Product/Service Enquiries [ +603-2050 4466, portal@bernama.com ]